1 00:00:09,720 --> 00:00:12,880 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene with 2 00:00:13,560 --> 00:00:16,520 Speaker 1: David Gura. Daily we bring you insight from the best 3 00:00:16,560 --> 00:00:22,239 Speaker 1: of economics, finance, investment, and international relations. Find Bloomberg Surveillance 4 00:00:22,320 --> 00:00:27,000 Speaker 1: on Apple Podcasts, SoundCloud, Bloomberg dot Com, and of course 5 00:00:27,320 --> 00:00:33,400 Speaker 1: on the Bloomberg. Joining us now in our Bloomberg eleven 6 00:00:33,440 --> 00:00:35,479 Speaker 1: three studios is Steve Iceman. He's a portfolio manager in 7 00:00:35,520 --> 00:00:37,000 Speaker 1: New Burger Berman. Great to have you with us here 8 00:00:37,360 --> 00:00:39,040 Speaker 1: once again. And I suppose we should start with the 9 00:00:39,080 --> 00:00:42,120 Speaker 1: bank earnings. We had three major banks reporting last week. 10 00:00:42,159 --> 00:00:44,520 Speaker 1: Two to come tomorrow. We have Goldman, sax and Morgan 11 00:00:44,560 --> 00:00:46,639 Speaker 1: Stanley as well. Let's just take stock of what we've 12 00:00:46,680 --> 00:00:50,200 Speaker 1: seen thus far. Earnings have come in line with the expectations. 13 00:00:50,200 --> 00:00:52,760 Speaker 1: Of course, there's some quirkiness the third quarter earnings as well. 14 00:00:52,880 --> 00:00:54,560 Speaker 1: What you've been watching is as the bank earnings have 15 00:00:54,640 --> 00:00:59,760 Speaker 1: been coming in, Um, I've been ignoring them possible for what? 16 00:01:00,040 --> 00:01:03,280 Speaker 1: For what reason? Do explain that? Completely irrelevant? How self? 17 00:01:04,720 --> 00:01:06,560 Speaker 1: You know the bank artians will do whatever they'll be. 18 00:01:06,600 --> 00:01:09,960 Speaker 1: They're very similar to the second quarter. Um, you know, 19 00:01:10,319 --> 00:01:13,880 Speaker 1: the analysts will print what they print about who did 20 00:01:13,920 --> 00:01:15,839 Speaker 1: a little better, who a little, a little little worse 21 00:01:16,040 --> 00:01:21,839 Speaker 1: as completely meaningless. Because the big story is the deregulatory story, 22 00:01:22,160 --> 00:01:24,520 Speaker 1: and that's that's going to be coming down the pike 23 00:01:24,600 --> 00:01:26,760 Speaker 1: over the next six to nine months. Let's stick into 24 00:01:26,800 --> 00:01:29,600 Speaker 1: that story a bit. A few months back, the Treasury 25 00:01:29,600 --> 00:01:35,040 Speaker 1: Department released it's its first round of reports on on regulation, 26 00:01:35,480 --> 00:01:37,760 Speaker 1: How it sees regulation, what what it intends or hopes 27 00:01:37,800 --> 00:01:40,120 Speaker 1: to do with regard to to regulation. How clear a 28 00:01:40,240 --> 00:01:43,000 Speaker 1: message on that front have we gotten from from this administration. 29 00:01:43,000 --> 00:01:44,600 Speaker 1: We can talk a bit about what Gary Cone had 30 00:01:44,640 --> 00:01:47,240 Speaker 1: to say over over the weekend, but is there clarity 31 00:01:47,240 --> 00:01:49,840 Speaker 1: from this administration about how it would like to see 32 00:01:49,840 --> 00:01:55,640 Speaker 1: that terrain change was It's as clear as day. Um. 33 00:01:55,680 --> 00:01:58,400 Speaker 1: You know, I wear two hats. I wear the hat 34 00:01:58,480 --> 00:02:01,600 Speaker 1: of American American citizen, and this is what I would 35 00:02:01,600 --> 00:02:06,080 Speaker 1: do if I was God forbidden charge. Um. And then 36 00:02:06,120 --> 00:02:10,079 Speaker 1: there's the hat of I'm not in charge. And it's 37 00:02:10,200 --> 00:02:11,880 Speaker 1: very clear to me what the regulators are gonna do. 38 00:02:12,000 --> 00:02:13,840 Speaker 1: What does that mean for bank stocks? I mean, if 39 00:02:13,919 --> 00:02:17,040 Speaker 1: I was in charge, I would change very little. But 40 00:02:17,800 --> 00:02:23,280 Speaker 1: I'm not in charge. And as as it is very obvious, um, 41 00:02:23,880 --> 00:02:27,120 Speaker 1: And this is an administration that comes up with excuse 42 00:02:27,240 --> 00:02:31,840 Speaker 1: after excuse about why Dodd Frank is bad, and they 43 00:02:31,880 --> 00:02:34,079 Speaker 1: are not gonna be able to change, actually change Dodd 44 00:02:34,120 --> 00:02:36,800 Speaker 1: Frank from a legislative perspective. So they're going to do 45 00:02:36,840 --> 00:02:39,600 Speaker 1: it through the back door, through the regulatory process, because 46 00:02:40,160 --> 00:02:43,800 Speaker 1: you know, Dodd Frank leaves a lot of them for interpretation. Um. 47 00:02:43,840 --> 00:02:47,080 Speaker 1: You know, the prior regime under the OBAA administration was 48 00:02:47,160 --> 00:02:50,480 Speaker 1: very very strict about the banks. They took leverage down enormously. 49 00:02:50,600 --> 00:02:55,919 Speaker 1: They interpreted the vocal rule extremely strictly. Um, And you're 50 00:02:55,919 --> 00:03:00,000 Speaker 1: going to see a partial reversal of what has happened. 51 00:03:00,080 --> 00:03:03,079 Speaker 1: We're not gonna go anywhere close to where we were 52 00:03:03,200 --> 00:03:05,519 Speaker 1: pre crisis. You know. Just to give you a couple 53 00:03:05,560 --> 00:03:07,799 Speaker 1: of numbers, City Group used to be levered thirty three 54 00:03:07,840 --> 00:03:11,200 Speaker 1: to one. Today it's levered ten to one. You know, 55 00:03:11,240 --> 00:03:13,639 Speaker 1: my expectations over the next few years maybe it goes 56 00:03:13,720 --> 00:03:18,880 Speaker 1: to thirteen fourteen to one, which would not be a calamity, um, 57 00:03:18,919 --> 00:03:21,080 Speaker 1: but it would certainly make City Group a lot more profitable. 58 00:03:21,680 --> 00:03:23,640 Speaker 1: And that's the direction we're gonna go in. It's going 59 00:03:23,680 --> 00:03:29,639 Speaker 1: to happen in a very bureaucratese technocratic, complicated ways. So 60 00:03:29,720 --> 00:03:33,440 Speaker 1: it's gonna be very hard for UM politicians to complain 61 00:03:33,480 --> 00:03:37,600 Speaker 1: about it because they won't understand it. And that's intentional. Yeah, 62 00:03:38,240 --> 00:03:40,440 Speaker 1: how how quickly can that happen? I look at the 63 00:03:40,720 --> 00:03:44,360 Speaker 1: way that Dodd Frank came into being. Having lived in Washington, 64 00:03:44,400 --> 00:03:48,520 Speaker 1: I for a time was noting the thousands and thousands 65 00:03:48,520 --> 00:03:52,040 Speaker 1: of pages of comments letter implementing these rules, going from 66 00:03:52,080 --> 00:03:53,960 Speaker 1: draft to draft to draft to final rule took a 67 00:03:53,960 --> 00:03:57,040 Speaker 1: lot of time. If there is a lot of bureacrats, 68 00:03:57,040 --> 00:04:00,080 Speaker 1: as you put it, does does that slow down the 69 00:04:00,120 --> 00:04:04,000 Speaker 1: process at all? Help quickly in this come into play? Um, 70 00:04:04,040 --> 00:04:06,760 Speaker 1: it will start to happen very quickly, but it's going 71 00:04:06,800 --> 00:04:09,400 Speaker 1: to take about four years to actually happen. And what 72 00:04:09,440 --> 00:04:11,720 Speaker 1: I mean by that is the FED regulates the banks 73 00:04:11,720 --> 00:04:15,080 Speaker 1: to the annual stress test. Um, let's just say I 74 00:04:15,160 --> 00:04:17,040 Speaker 1: think that's starting next year, they're going to grade on 75 00:04:17,080 --> 00:04:20,839 Speaker 1: an easier curve, and so you will see a higher 76 00:04:20,839 --> 00:04:24,599 Speaker 1: percentage of stock buy back and you'll see but but 77 00:04:25,040 --> 00:04:27,640 Speaker 1: they're not going to let the banks buy back of 78 00:04:27,680 --> 00:04:29,919 Speaker 1: them income. You know, this year, y, you're able to 79 00:04:29,920 --> 00:04:32,520 Speaker 1: buy back a next year, I think there'll there'll be 80 00:04:32,560 --> 00:04:36,720 Speaker 1: something like so leverls are gonna start to inch up, 81 00:04:36,839 --> 00:04:40,480 Speaker 1: emphasis on inch, so you know it's going to take 82 00:04:40,520 --> 00:04:42,640 Speaker 1: about a three or four years to to sort of 83 00:04:42,680 --> 00:04:47,120 Speaker 1: move the leverage anywhere in any meaningful sense. Do we 84 00:04:47,240 --> 00:04:49,680 Speaker 1: understand how big the banks are? One of the things 85 00:04:49,720 --> 00:04:53,160 Speaker 1: I found over the years in the media is there's 86 00:04:53,160 --> 00:04:56,799 Speaker 1: a complete misunderstanding of the scope and scale of these beasts. 87 00:04:57,800 --> 00:05:02,640 Speaker 1: Revenue for JP Morgan Bill, revenue for City Group seventy billion, 88 00:05:03,080 --> 00:05:07,160 Speaker 1: operating income twenty three plus thirty four. Between the two 89 00:05:07,240 --> 00:05:11,200 Speaker 1: of them, they have something like fifty seven billion dollars 90 00:05:11,240 --> 00:05:15,000 Speaker 1: of operating income down income statement, is that your advantage 91 00:05:15,000 --> 00:05:18,640 Speaker 1: as an investor? Because we really don't understand the sheer 92 00:05:18,720 --> 00:05:23,839 Speaker 1: mass of these beasts. I don't know if that's you know, 93 00:05:23,880 --> 00:05:27,040 Speaker 1: people like to focus on that a lot um. You know, 94 00:05:27,320 --> 00:05:30,240 Speaker 1: they're big because the economy is really big. I mean, 95 00:05:30,800 --> 00:05:33,520 Speaker 1: so I don't pay all that much attention to it. 96 00:05:33,600 --> 00:05:35,039 Speaker 1: You know. One of the reasons why the big banks 97 00:05:35,080 --> 00:05:37,919 Speaker 1: are so big today is that during the height of 98 00:05:37,960 --> 00:05:42,480 Speaker 1: the crisis um the regulators basically begged some of the 99 00:05:42,560 --> 00:05:45,680 Speaker 1: larger banks to buy some of the other institutions. So 100 00:05:45,720 --> 00:05:49,600 Speaker 1: Well's Fogleboat, Wacovia, um, you know, on and on and on. 101 00:05:49,760 --> 00:05:52,160 Speaker 1: JP Morgan is bigger because of what bear Sterns and 102 00:05:52,480 --> 00:05:56,080 Speaker 1: Carebuich other institution it boy, but it port something else. Um, 103 00:05:56,200 --> 00:05:58,760 Speaker 1: so they were sort of stuck with it. But I 104 00:05:59,120 --> 00:06:02,560 Speaker 1: don't focus all that much on the size issue. I 105 00:06:02,600 --> 00:06:05,240 Speaker 1: focus much more on the leverage issue. Are we gonna 106 00:06:05,240 --> 00:06:10,040 Speaker 1: see our regional bank mergers? I think if we do, 107 00:06:10,680 --> 00:06:13,640 Speaker 1: you're gonna have to first. So the stress test starts 108 00:06:13,640 --> 00:06:17,680 Speaker 1: at fifty billion in assets, So anybody in the stress 109 00:06:17,720 --> 00:06:23,560 Speaker 1: test but meaning fifty billion up ain't merging. My expectation 110 00:06:23,680 --> 00:06:26,520 Speaker 1: is that that level, that number will probably go up 111 00:06:26,560 --> 00:06:31,520 Speaker 1: to something like two hundred billion, and when that happens, 112 00:06:32,200 --> 00:06:37,080 Speaker 1: you'll begin to see some mergers or some some fairly 113 00:06:37,080 --> 00:06:39,440 Speaker 1: significant size bags. But that's the first thing that has 114 00:06:39,480 --> 00:06:41,040 Speaker 1: to happen. And to give you an idea of a 115 00:06:41,120 --> 00:06:44,599 Speaker 1: fifty billion in the path, the two billion David City 116 00:06:44,600 --> 00:06:48,680 Speaker 1: groups total assets are one thousand, eight hundred eight nine 117 00:06:48,760 --> 00:06:54,919 Speaker 1: billion versus two. Again, the size issue is huge. I 118 00:06:54,960 --> 00:06:56,960 Speaker 1: know that you and Tom we're talking on TV about 119 00:06:56,960 --> 00:06:58,840 Speaker 1: these comments that Garry Cone made over the weekend at 120 00:06:58,839 --> 00:07:01,640 Speaker 1: this Group of thirty confab in Washington, d C. He 121 00:07:02,279 --> 00:07:06,200 Speaker 1: sounded declarion about clearing. He thought that that's particularly risky 122 00:07:06,240 --> 00:07:07,640 Speaker 1: at this point. A couple of weeks back, we had 123 00:07:07,680 --> 00:07:10,320 Speaker 1: the new chairman of the CFTC sitting in the seat 124 00:07:10,320 --> 00:07:14,120 Speaker 1: you're sitting in now, and he painted a fairly rosy 125 00:07:14,160 --> 00:07:16,280 Speaker 1: picture of his institution in the work that it's doing, 126 00:07:16,360 --> 00:07:19,200 Speaker 1: while commenting on the size, the immense size of the 127 00:07:19,360 --> 00:07:25,120 Speaker 1: derivatives marketplace. How at risk is that apparatus, that regulatory apparatus, 128 00:07:25,200 --> 00:07:27,480 Speaker 1: and how far have we come from the financial crisis 129 00:07:27,560 --> 00:07:31,120 Speaker 1: to now in terms of the power imbued into the CFTC. 130 00:07:31,280 --> 00:07:33,720 Speaker 1: And it's it's ability to regulate that that massive space, 131 00:07:37,080 --> 00:07:42,000 Speaker 1: you know, it's this is not my area of actorities. UM. 132 00:07:43,040 --> 00:07:45,600 Speaker 1: You know, I think the derivative market is safer today 133 00:07:45,640 --> 00:07:49,520 Speaker 1: than it was, you know, the derivatives that you know, 134 00:07:49,640 --> 00:07:53,360 Speaker 1: lots of different kinds of derivatives. As there's interest rate swaps, 135 00:07:53,440 --> 00:07:56,240 Speaker 1: which I don't think anybody really has a problem with. UM. 136 00:07:56,360 --> 00:07:58,360 Speaker 1: The area that was that was the problems credit to 137 00:07:58,440 --> 00:08:01,760 Speaker 1: fault swaps. That's a lot smaller to say than it was. 138 00:08:02,080 --> 00:08:06,520 Speaker 1: I I gave an example UM in two thousand and sixteen, 139 00:08:06,720 --> 00:08:13,040 Speaker 1: between the end of January and February, the credit to 140 00:08:13,080 --> 00:08:15,679 Speaker 1: fould swap spreads on Deutsche Bank went from a hundred 141 00:08:15,680 --> 00:08:19,040 Speaker 1: basis points to three hundred basis points and people started 142 00:08:19,080 --> 00:08:21,600 Speaker 1: to freak out about that because that's an awfully big 143 00:08:21,680 --> 00:08:24,440 Speaker 1: move and reminded people of the crisis a little bit. 144 00:08:24,920 --> 00:08:27,680 Speaker 1: And what they didn't know at the time was that 145 00:08:27,800 --> 00:08:32,480 Speaker 1: the volume that was traded on that huge move was 146 00:08:32,559 --> 00:08:38,079 Speaker 1: seventy five million dollars now and during pre crisis on 147 00:08:38,200 --> 00:08:40,360 Speaker 1: such a move, the amount that would have been traded 148 00:08:40,360 --> 00:08:44,679 Speaker 1: would have been ten billion dollars. So it just gives 149 00:08:44,720 --> 00:08:46,720 Speaker 1: you an idea of how much smaller than the credit 150 00:08:46,800 --> 00:08:49,480 Speaker 1: to fuld s market is today. Stee, thanks for the visit, 151 00:08:49,520 --> 00:08:54,320 Speaker 1: Steve icewand with this new today as we look at 152 00:08:54,320 --> 00:08:59,559 Speaker 1: bond markets and make note of his optimism. Overall his optimism, 153 00:08:59,679 --> 00:09:02,679 Speaker 1: he also did not mention when Selena Gomez will appear 154 00:09:02,720 --> 00:09:06,880 Speaker 1: with us to speak about Richard Taylor. And to that 155 00:09:08,240 --> 00:09:13,240 Speaker 1: reply on Twitter, Aty reached out talked to people. Effort 156 00:09:13,720 --> 00:09:28,320 Speaker 1: was she's a busy touring schedule. I was looking up 157 00:09:28,360 --> 00:09:33,880 Speaker 1: Oklahoma here David grew up and the presidential vote, Pama yes, 158 00:09:34,120 --> 00:09:39,800 Speaker 1: and then I present Secretary Clinton got twenty nine percent 159 00:09:39,880 --> 00:09:44,920 Speaker 1: of the vote, which the President got six of the 160 00:09:45,000 --> 00:09:48,680 Speaker 1: vote and Mr Johnson of the l Party got six 161 00:09:48,760 --> 00:09:51,280 Speaker 1: percent of the vote. But I find it interesting that 162 00:09:51,480 --> 00:09:54,640 Speaker 1: Secretary Clinton got less than thirty percent of the vote. 163 00:09:54,679 --> 00:09:57,720 Speaker 1: I did not know that he could bring in now 164 00:09:57,960 --> 00:10:00,079 Speaker 1: the former U. S. Senator from Oklahoma. He's here to 165 00:10:00,200 --> 00:10:03,840 Speaker 1: a decade in the U S. Senate, medical doctor turned congressman, 166 00:10:03,880 --> 00:10:05,840 Speaker 1: then Senator Tom Coburan joining us now on our phone lines. 167 00:10:05,880 --> 00:10:08,199 Speaker 1: Tom quickly before I bring in the senator. One of 168 00:10:08,240 --> 00:10:10,640 Speaker 1: my favorite things about him was in two thousand and fifteen, 169 00:10:10,679 --> 00:10:13,440 Speaker 1: as his retirement date approached, he could tick off how 170 00:10:13,520 --> 00:10:15,400 Speaker 1: many days he had left until he was able to 171 00:10:15,559 --> 00:10:18,600 Speaker 1: leave the capital. A complex. Great to speak you this morning, 172 00:10:18,679 --> 00:10:20,680 Speaker 1: Senator Cobourn. And let me ask you, as you've observed 173 00:10:20,720 --> 00:10:23,480 Speaker 1: Washington since you left, over these last two years, how 174 00:10:23,600 --> 00:10:26,079 Speaker 1: much has has changed? How much is the story of 175 00:10:26,240 --> 00:10:30,040 Speaker 1: dysfunction of government in action the same as it was 176 00:10:30,080 --> 00:10:33,320 Speaker 1: when you left in two thousand fifteen. Oh, I think 177 00:10:33,360 --> 00:10:35,679 Speaker 1: it's the same. The last two years that I was 178 00:10:35,760 --> 00:10:38,240 Speaker 1: in the Senate, there were seven amendments that were considered 179 00:10:38,280 --> 00:10:41,760 Speaker 1: on the floor. Uh, I mean, you know, and I 180 00:10:41,880 --> 00:10:44,679 Speaker 1: had several of those. Actually that was the last year. 181 00:10:45,040 --> 00:10:47,240 Speaker 1: The year before that, I think there were twelve. So 182 00:10:47,400 --> 00:10:49,680 Speaker 1: the Senate had been shut down by Harry Reid because 183 00:10:49,679 --> 00:10:52,280 Speaker 1: they didn't want to take hard votes. Uh. And so 184 00:10:52,880 --> 00:10:55,679 Speaker 1: it's a disease that both Republicans and the Democrats have 185 00:10:56,360 --> 00:10:58,760 Speaker 1: is the next election is more important than the future 186 00:10:58,800 --> 00:11:01,920 Speaker 1: of our country. And there are exceptions to that in 187 00:11:02,000 --> 00:11:04,880 Speaker 1: both parties, but by and large, the vast majority of 188 00:11:04,960 --> 00:11:08,240 Speaker 1: career politicians are more interested in the next election than 189 00:11:08,280 --> 00:11:10,200 Speaker 1: there are in terms of fixing problems. And the reason 190 00:11:10,520 --> 00:11:12,439 Speaker 1: what you even know that is who's working on the 191 00:11:13,120 --> 00:11:17,480 Speaker 1: medicure default that's coming, or the SOB security default that's coming, 192 00:11:18,360 --> 00:11:22,520 Speaker 1: or the SOB security disabilities already defaulted and we're stealing 193 00:11:22,600 --> 00:11:26,679 Speaker 1: from regular social security. Now, who's working on those things? Nobody? 194 00:11:27,920 --> 00:11:31,520 Speaker 1: And so it means what they're doing is short term thinking, uh, 195 00:11:31,960 --> 00:11:35,080 Speaker 1: that is politically beneficial to one party or the other, 196 00:11:36,120 --> 00:11:38,360 Speaker 1: and in the long run, all the rest of America, 197 00:11:38,400 --> 00:11:41,440 Speaker 1: no matter which party is, loses. And that's why I left. 198 00:11:42,320 --> 00:11:44,480 Speaker 1: Nothing was happening there that was going to fix the 199 00:11:44,559 --> 00:11:47,959 Speaker 1: real diseases, the real disease of our country, which is 200 00:11:48,679 --> 00:11:51,439 Speaker 1: we're spending money we don't have. We promised benefits that 201 00:11:51,520 --> 00:11:54,480 Speaker 1: we can't pay, and nobody wants to fess up and 202 00:11:54,559 --> 00:11:57,520 Speaker 1: start addressing man. How much of this is the responsibility 203 00:11:57,520 --> 00:11:59,920 Speaker 1: of leadership? You mentioned that Senator read there if you 204 00:12:00,080 --> 00:12:02,160 Speaker 1: moments ago. Now, Mitch McConnell's in office, and in these 205 00:12:02,200 --> 00:12:04,280 Speaker 1: recent days we fre from a number of conservative groups 206 00:12:04,320 --> 00:12:06,920 Speaker 1: saying he needs to go. The Republican Party in the 207 00:12:06,960 --> 00:12:09,400 Speaker 1: Senate shouldn't be led by by Senator Mitch McConnell. It's 208 00:12:09,440 --> 00:12:12,280 Speaker 1: time for some some new blood, some new leadership. How 209 00:12:12,360 --> 00:12:14,080 Speaker 1: confident are you that if he were to leave, if 210 00:12:14,160 --> 00:12:16,480 Speaker 1: somebody knew where to lead the party in the Senate, 211 00:12:16,559 --> 00:12:19,600 Speaker 1: we might see some of the changes you describe. I'm 212 00:12:19,640 --> 00:12:22,679 Speaker 1: not I'm not confident of that. I'm not sure. You know. 213 00:12:23,280 --> 00:12:25,880 Speaker 1: I would tell you that the vast majority of the 214 00:12:25,960 --> 00:12:31,920 Speaker 1: Senate this career politicians. That's what they went into. I mean, 215 00:12:32,000 --> 00:12:34,560 Speaker 1: they may have some limitsed work to experience very early 216 00:12:34,640 --> 00:12:36,439 Speaker 1: in their careers, but most of them that's all I've 217 00:12:36,480 --> 00:12:39,800 Speaker 1: ever done. So I'm not certain that will happen. I 218 00:12:39,880 --> 00:12:45,480 Speaker 1: think you know, we're we're divided geographically, were divided, uh socially, 219 00:12:46,080 --> 00:12:51,120 Speaker 1: were divided fiscally. Uh. People who pay a small amount 220 00:12:51,160 --> 00:12:54,560 Speaker 1: of tax thinks their taxes are too high. People who 221 00:12:54,640 --> 00:12:56,760 Speaker 1: pay a whole lot of tax I think their taxes 222 00:12:56,800 --> 00:12:59,719 Speaker 1: are too high. But nobody's asking the question, what's the 223 00:13:00,000 --> 00:13:03,640 Speaker 1: acts that's gonna come on our children and grandchildren by 224 00:13:03,800 --> 00:13:07,160 Speaker 1: they're in action right now, so there's going to be 225 00:13:07,760 --> 00:13:10,280 Speaker 1: It's amazing at the amount. You know, it's a hundred 226 00:13:10,320 --> 00:13:14,320 Speaker 1: and twenty four threion dollars of unfunded liabilities it's going 227 00:13:14,400 --> 00:13:19,240 Speaker 1: to be due over the next fifty years. Well, Senator, 228 00:13:19,559 --> 00:13:21,559 Speaker 1: I think one of the great things about you, in 229 00:13:21,679 --> 00:13:25,920 Speaker 1: an oddity and rarity among human conditions, including our lovelies 230 00:13:26,000 --> 00:13:28,599 Speaker 1: on Capitol Hill, is the idea you went back and 231 00:13:28,679 --> 00:13:32,760 Speaker 1: got a medical degree at age thirty five? Is that right? Yeah? 232 00:13:32,960 --> 00:13:34,720 Speaker 1: I mean that's something I think a lot of people 233 00:13:34,760 --> 00:13:37,080 Speaker 1: look at and are you kidding me? That's just outstanding. 234 00:13:38,080 --> 00:13:43,840 Speaker 1: Where where do we go to get to compromise needed 235 00:13:43,960 --> 00:13:48,440 Speaker 1: for these big pieces of legislation right now Monday morning, 236 00:13:48,840 --> 00:13:51,760 Speaker 1: we're looking at the failure in AFTA, We're looking at 237 00:13:51,840 --> 00:13:55,480 Speaker 1: some form of regurgitation of the Affordable Care Act, and 238 00:13:55,559 --> 00:14:00,520 Speaker 1: the mystery attacks reform and and the nation all of 239 00:14:00,600 --> 00:14:05,079 Speaker 1: our listeners of all political persuasions are begging, begging for 240 00:14:05,400 --> 00:14:11,280 Speaker 1: doers like you are they left standing on Capitol Hill. No, 241 00:14:11,520 --> 00:14:16,560 Speaker 1: I healthcare is going to fix itself, and that's because 242 00:14:16,760 --> 00:14:21,520 Speaker 1: greed conquerors technologic difficulties. And what we know is one 243 00:14:21,600 --> 00:14:24,720 Speaker 1: out every three dollars spent in healthcare today doesn't help anybody, 244 00:14:25,280 --> 00:14:28,320 Speaker 1: doesn't prevent him from getting well then, but doesn't prevent 245 00:14:28,400 --> 00:14:30,560 Speaker 1: him from getting sick, and doesn't cure him when once 246 00:14:30,640 --> 00:14:34,400 Speaker 1: they are. So that's about one point three trillion dollars. 247 00:14:35,840 --> 00:14:39,000 Speaker 1: And the one thing that's never happened since before World 248 00:14:39,080 --> 00:14:43,400 Speaker 1: War Two is we've never had real market forces working 249 00:14:43,480 --> 00:14:48,040 Speaker 1: because there's been no price discovery. And so one of 250 00:14:48,120 --> 00:14:50,360 Speaker 1: the things I would suggest, if the Congress is gonna 251 00:14:50,400 --> 00:14:55,920 Speaker 1: do anything, just mandate price transparency everywhere. And well, did 252 00:14:56,160 --> 00:15:00,440 Speaker 1: you laud the President for pushing this Debate Act to 253 00:15:00,640 --> 00:15:06,280 Speaker 1: people like you? Sure? Look, I travel around talking about 254 00:15:06,320 --> 00:15:08,400 Speaker 1: this all the time. I know a company in Tulsa, 255 00:15:08,400 --> 00:15:10,480 Speaker 1: Oklahoma is saving a quarter of a million dollars a 256 00:15:10,520 --> 00:15:15,400 Speaker 1: month right now, just based on price transparency, based on 257 00:15:15,520 --> 00:15:18,760 Speaker 1: an app that somebody developed to give them price transparency 258 00:15:18,840 --> 00:15:23,080 Speaker 1: for their employees. And so so you know, that's that's 259 00:15:23,160 --> 00:15:26,640 Speaker 1: three million bucks a year in their healthcare costs. And 260 00:15:26,840 --> 00:15:30,680 Speaker 1: so what my experience, tom is I delivered about Oh, 261 00:15:30,760 --> 00:15:33,720 Speaker 1: I don't know how many hundred Amish babies and took 262 00:15:33,760 --> 00:15:36,680 Speaker 1: care of Amish families, and they always bought health care 263 00:15:36,760 --> 00:15:39,880 Speaker 1: about thirty or five or less than everybody else because 264 00:15:39,920 --> 00:15:44,160 Speaker 1: they went and found out prices before they bought. And 265 00:15:44,320 --> 00:15:48,560 Speaker 1: so if we would just have price transparency all of 266 00:15:48,640 --> 00:15:51,920 Speaker 1: a sudden, you know, Working's put out of an article 267 00:15:52,000 --> 00:15:54,800 Speaker 1: in late April about the lack of competition of the 268 00:15:54,880 --> 00:15:58,680 Speaker 1: large hospital chains and how they increased the cost and 269 00:15:58,840 --> 00:16:02,840 Speaker 1: how we ought to have a significant antitrust activity going 270 00:16:02,920 --> 00:16:07,280 Speaker 1: after the large both nonprofit and profit based hospitals and 271 00:16:07,480 --> 00:16:10,320 Speaker 1: what that would do. The Federal Trade Commission has said 272 00:16:10,320 --> 00:16:12,680 Speaker 1: the best care in the country at the lowest prices 273 00:16:12,760 --> 00:16:15,320 Speaker 1: the position to owned hospitals. They've been banned under the 274 00:16:15,360 --> 00:16:20,120 Speaker 1: Affordable CARA. I mean, let's let markets work, and if 275 00:16:20,200 --> 00:16:23,480 Speaker 1: we would, then what we would start seeing as ways 276 00:16:23,600 --> 00:16:25,760 Speaker 1: for people to figure out how to buy it cheaper. 277 00:16:26,080 --> 00:16:28,840 Speaker 1: What do you and we need a safety that I'm 278 00:16:28,880 --> 00:16:31,280 Speaker 1: not benign that we need safety that we can do that, 279 00:16:31,480 --> 00:16:33,760 Speaker 1: but we don't you know. What we need is the 280 00:16:33,840 --> 00:16:36,520 Speaker 1: prices to come down, and transparency in terms of price 281 00:16:36,640 --> 00:16:39,760 Speaker 1: discovery will force a lot of that. What do you 282 00:16:39,800 --> 00:16:43,440 Speaker 1: say to the individual who has been relying on those 283 00:16:43,480 --> 00:16:45,480 Speaker 1: cost sharing steps these we see the President kicking this 284 00:16:45,600 --> 00:16:47,240 Speaker 1: over to Congress. It's up to them now whether or 285 00:16:47,240 --> 00:16:49,600 Speaker 1: not to appropriate that money. But there's some concern that's 286 00:16:49,640 --> 00:16:52,080 Speaker 1: not going to happen. You describe the inaction on the 287 00:16:52,160 --> 00:16:56,120 Speaker 1: Capitol Hill. Uh. Is that person not imperiled by what's 288 00:16:56,160 --> 00:16:59,680 Speaker 1: happened here? Yes, they are. But here here's a couple 289 00:16:59,720 --> 00:17:01,720 Speaker 1: of things that are happening. Number one is they can 290 00:17:01,800 --> 00:17:05,159 Speaker 1: lower their cost by raising their deductible even further. And 291 00:17:05,240 --> 00:17:08,040 Speaker 1: if you had price discovery, most of that expense isn't 292 00:17:08,040 --> 00:17:10,840 Speaker 1: going to be paid. Uh. They'll give you example that 293 00:17:11,040 --> 00:17:14,080 Speaker 1: the typical hospital based m r I for the spine 294 00:17:14,880 --> 00:17:18,800 Speaker 1: is about four thousand bucks. In a free standing clinic 295 00:17:19,119 --> 00:17:22,840 Speaker 1: that does imaging it's about five So you see in 296 00:17:22,920 --> 00:17:26,359 Speaker 1: about seven to eightfold increasing costs. So if in fact 297 00:17:26,400 --> 00:17:29,560 Speaker 1: they could actually see what things cost, they're out of pocket. 298 00:17:29,640 --> 00:17:33,440 Speaker 1: The other thing that's happening is direct primary care UM 299 00:17:34,040 --> 00:17:38,280 Speaker 1: and David. The direct primary care for a family of 300 00:17:38,320 --> 00:17:41,119 Speaker 1: four is about twenty dollars a year. That's everything except 301 00:17:41,160 --> 00:17:45,040 Speaker 1: your hospitalization. So let them buy it. Let them buy 302 00:17:45,080 --> 00:17:49,879 Speaker 1: a hospitalization only policy, and that's about half of what 303 00:17:50,000 --> 00:17:54,040 Speaker 1: the average deductible is today, and they're well on their 304 00:17:54,080 --> 00:17:59,480 Speaker 1: way to getting the preventative care shots, immunizations, getting stitched up, 305 00:17:59,680 --> 00:18:03,040 Speaker 1: getting broken arm thing. In other words, market will work 306 00:18:03,160 --> 00:18:05,240 Speaker 1: if we will allow and then we can create a 307 00:18:05,359 --> 00:18:09,520 Speaker 1: real safety for those that don't have the mean. But 308 00:18:09,680 --> 00:18:12,880 Speaker 1: remember this promise on Medicaid didn't gonna last because we're 309 00:18:12,880 --> 00:18:15,440 Speaker 1: not gonna have money to make it last. One final question, 310 00:18:15,520 --> 00:18:17,920 Speaker 1: if we could, senor very quickly here, how is the 311 00:18:18,000 --> 00:18:21,520 Speaker 1: support for the president and the President's Oklahoma? Is the 312 00:18:21,600 --> 00:18:26,280 Speaker 1: support us? It's solid, No, I think it's what he's 313 00:18:26,280 --> 00:18:29,520 Speaker 1: done is created a real division of between what he 314 00:18:29,600 --> 00:18:32,200 Speaker 1: says and what the press says. And of course most 315 00:18:32,240 --> 00:18:34,000 Speaker 1: of the time they don't believe the press. I'm not 316 00:18:34,080 --> 00:18:36,600 Speaker 1: sure they all the time they believe him, but I 317 00:18:36,720 --> 00:18:39,240 Speaker 1: would tell you kind of throughout the country, what you 318 00:18:39,320 --> 00:18:41,359 Speaker 1: see is those people who voted for him, even though 319 00:18:41,400 --> 00:18:44,280 Speaker 1: at times they're embarrassed, they're still like the things that 320 00:18:45,200 --> 00:18:47,119 Speaker 1: the good Senator from Oklahoma heard Tom's talk of the 321 00:18:47,119 --> 00:18:48,600 Speaker 1: sooner has agreed to stay with us here for another 322 00:18:48,600 --> 00:18:51,400 Speaker 1: block on for surveillance. Senator Tom Coping before we send 323 00:18:51,520 --> 00:18:52,879 Speaker 1: Tom Coping with us on our phone lines. And I 324 00:18:52,920 --> 00:18:54,960 Speaker 1: know you're on the Homeland Security Committee, Senator when you're 325 00:18:55,000 --> 00:18:56,520 Speaker 1: when you're in the in the Senate, and I wanted 326 00:18:56,520 --> 00:18:59,359 Speaker 1: to ask you just how you've observed the fallout from 327 00:18:59,400 --> 00:19:02,639 Speaker 1: these storms in the Caribbean and UH and and what 328 00:19:02,760 --> 00:19:05,040 Speaker 1: you make of the government response so far the present. 329 00:19:05,119 --> 00:19:07,760 Speaker 1: Now nominating somebody intending to nominate somebody to be the 330 00:19:07,800 --> 00:19:11,680 Speaker 1: next Secretary of Homeland Security. Well, I think that you know, 331 00:19:11,840 --> 00:19:15,280 Speaker 1: they learned from the large tragedy in the previous Houston 332 00:19:15,359 --> 00:19:20,680 Speaker 1: and New Orleans UH hurricane. The problem in Puerto Rico 333 00:19:20,920 --> 00:19:22,800 Speaker 1: really wasn't getting the stuff there, it was getting it 334 00:19:22,880 --> 00:19:26,520 Speaker 1: distributed once it got there, UH. And they just weren't 335 00:19:26,640 --> 00:19:30,120 Speaker 1: capable drivers evidently to do it. But I think overall 336 00:19:30,160 --> 00:19:33,800 Speaker 1: I get Homeland Security a good writing on how they responded, 337 00:19:34,000 --> 00:19:36,480 Speaker 1: how they pre staged things knowing that was coming, and 338 00:19:36,560 --> 00:19:39,400 Speaker 1: how they how they've got it dispensed. There's a long 339 00:19:39,480 --> 00:19:41,160 Speaker 1: time to go, a long way to go with both 340 00:19:41,359 --> 00:19:48,400 Speaker 1: Houston and UH, the Southern Florida and uh Puerto Rico. 341 00:19:48,480 --> 00:19:51,880 Speaker 1: But overall, I think you know, those aren't easy things. 342 00:19:52,840 --> 00:19:55,119 Speaker 1: Government sometimes has tasked to do things that are very 343 00:19:55,200 --> 00:19:58,920 Speaker 1: very difficult. Something that that appears to be very difficult 344 00:19:58,960 --> 00:20:01,359 Speaker 1: has been the relationship with between the Congress and the 345 00:20:01,440 --> 00:20:03,159 Speaker 1: president over these last a few months. And I know 346 00:20:03,240 --> 00:20:06,040 Speaker 1: that you enjoyed a fairly good relationship with the previous 347 00:20:06,080 --> 00:20:09,040 Speaker 1: sit president. What what advice would you give this current 348 00:20:09,119 --> 00:20:11,760 Speaker 1: president about working how to work with Congress? How do 349 00:20:11,840 --> 00:20:14,760 Speaker 1: you make that relationship better? Is it piecemeal? Let's it 350 00:20:14,840 --> 00:20:16,760 Speaker 1: go into the golf course one by one with with 351 00:20:16,920 --> 00:20:18,879 Speaker 1: members of the senatories. There are a better way to 352 00:20:19,000 --> 00:20:23,600 Speaker 1: understand how each of these institutions works and should work together. Well, 353 00:20:23,680 --> 00:20:25,840 Speaker 1: I you know, I first of all, Donald Trump is 354 00:20:25,880 --> 00:20:30,640 Speaker 1: a very complex, complicated guy, and uh it doesn't look 355 00:20:30,720 --> 00:20:34,120 Speaker 1: like he's gonna learning theory, doesn't appreciate appear to work 356 00:20:34,200 --> 00:20:36,800 Speaker 1: with him in terms of he does something good and 357 00:20:36,840 --> 00:20:39,119 Speaker 1: then steps on it, does something good and steps on it. 358 00:20:39,760 --> 00:20:43,480 Speaker 1: Uh So I'm not sure. I think you just kind 359 00:20:43,520 --> 00:20:45,440 Speaker 1: of got to take you Here's here's a guy that's 360 00:20:45,480 --> 00:20:50,520 Speaker 1: gonna pop off and probably not smartly, but still does it. 361 00:20:50,920 --> 00:20:55,160 Speaker 1: And it seems to recover from his base anyway. When 362 00:20:55,240 --> 00:20:57,960 Speaker 1: he does it, you know, I look deference and keeping 363 00:20:58,000 --> 00:21:00,720 Speaker 1: your mouth shut is oftentimes I had the feel a 364 00:21:00,760 --> 00:21:04,760 Speaker 1: problem with that myself, by the way. Uh, but you know, 365 00:21:05,359 --> 00:21:09,080 Speaker 1: the real question is what are people's motives? And when 366 00:21:09,119 --> 00:21:11,800 Speaker 1: you get into question the motives, then what your assumption 367 00:21:12,040 --> 00:21:16,800 Speaker 1: is is, uh, you're you don't have that same motive. 368 00:21:16,840 --> 00:21:21,040 Speaker 1: And I'd say most people have well are well intentioned. 369 00:21:21,119 --> 00:21:26,280 Speaker 1: In the Congress, sometimes their politics gets in the way 370 00:21:26,320 --> 00:21:28,359 Speaker 1: of that, and I think you know what you do 371 00:21:28,520 --> 00:21:31,440 Speaker 1: is you count to ten before you react. And we 372 00:21:31,560 --> 00:21:33,800 Speaker 1: haven't seen that much either from the President or other 373 00:21:33,840 --> 00:21:37,359 Speaker 1: people that he's talking to. Does Oklahoma? Does Oklahoma have 374 00:21:37,400 --> 00:21:42,520 Speaker 1: a sanctuary city? Not that I'm aware of. Yeah, I 375 00:21:42,640 --> 00:21:45,640 Speaker 1: was gonna say they don't. How do we get your 376 00:21:45,720 --> 00:21:48,600 Speaker 1: part of the your neck of the woods back together 377 00:21:48,800 --> 00:21:52,479 Speaker 1: with other necks of the woods identified by sanctuary cities. 378 00:21:52,880 --> 00:21:58,600 Speaker 1: How do we tom That's a great question. Uh. There, 379 00:21:58,760 --> 00:22:01,240 Speaker 1: But they're not looking at the real disease. They're looking 380 00:22:01,280 --> 00:22:05,600 Speaker 1: at the symptoms. Uh. The disease is rule of the law. 381 00:22:08,160 --> 00:22:11,200 Speaker 1: And what people in Oklahoma said, we're not anti Hispanic, 382 00:22:11,280 --> 00:22:14,480 Speaker 1: we're not anti anybody. But if you have a law, 383 00:22:14,760 --> 00:22:17,680 Speaker 1: either change it and don't enforce it to eliminate it, 384 00:22:18,200 --> 00:22:21,359 Speaker 1: but if it's on the books, enforce it. And the 385 00:22:21,680 --> 00:22:25,479 Speaker 1: former President Obama was really bad about that. He they 386 00:22:25,720 --> 00:22:28,720 Speaker 1: deferred on a lot of things that were not legal, 387 00:22:29,680 --> 00:22:33,600 Speaker 1: they just didn't enforce them. And so what happened was 388 00:22:33,760 --> 00:22:35,800 Speaker 1: is you got this big upright. I'll never forget the 389 00:22:35,880 --> 00:22:37,520 Speaker 1: first time I ran for the Senate, one of the 390 00:22:37,600 --> 00:22:40,640 Speaker 1: things I've heard the most was why didn't the rule 391 00:22:40,680 --> 00:22:44,720 Speaker 1: of law being enforced? Because here's what ultimately happens. When 392 00:22:44,920 --> 00:22:48,240 Speaker 1: the average Americans sees that the federal government doesn't enforce 393 00:22:48,320 --> 00:22:50,159 Speaker 1: the laws that are on the book, then all of 394 00:22:50,240 --> 00:22:52,640 Speaker 1: a sudden they start applying that themselves. Well it doesn't 395 00:22:52,640 --> 00:22:55,200 Speaker 1: apply to them, then then these laws don't apply to me, 396 00:22:55,880 --> 00:22:58,119 Speaker 1: and you have this breakdown. And it's one of the 397 00:22:58,240 --> 00:23:00,560 Speaker 1: key things that allows the republic to a vibe is 398 00:23:00,720 --> 00:23:03,680 Speaker 1: competence and the rule of law. So it's it's not 399 00:23:04,000 --> 00:23:07,600 Speaker 1: you know, it's not an issue of race. It's an 400 00:23:07,680 --> 00:23:11,760 Speaker 1: issue I think that's the problem. Would you suggest that 401 00:23:12,000 --> 00:23:14,879 Speaker 1: your competition, the Democratic Party, will come up with a 402 00:23:15,000 --> 00:23:19,119 Speaker 1: new Democrat Party that will tilt back towards the center 403 00:23:19,600 --> 00:23:23,880 Speaker 1: and so many suggests will happen. Well, I think both 404 00:23:23,960 --> 00:23:26,680 Speaker 1: need to do that a little bit. I think they 405 00:23:26,760 --> 00:23:29,240 Speaker 1: need to come back with the realization that, you know, 406 00:23:29,680 --> 00:23:31,920 Speaker 1: the Bernie Sanders movement, who's going to pay for the 407 00:23:32,000 --> 00:23:36,520 Speaker 1: student loans in medicare for everybody? But I mean, you know, 408 00:23:37,240 --> 00:23:41,240 Speaker 1: it's a pipe drink. It's not out there. The capability 409 00:23:41,359 --> 00:23:44,600 Speaker 1: to fund that in there. So you can think that, oh, 410 00:23:44,720 --> 00:23:48,240 Speaker 1: this is wonderful, but the reality is, we can't do that, 411 00:23:49,160 --> 00:23:50,840 Speaker 1: and the markets aren't going to let us do that. 412 00:23:51,400 --> 00:23:53,920 Speaker 1: The markets are barely letting us do what we're doing now. 413 00:23:54,840 --> 00:23:57,040 Speaker 1: And when we get back to normal interest rates on 414 00:23:57,119 --> 00:23:59,800 Speaker 1: our dead you know, our desk, it's going to skyrocket. 415 00:24:00,320 --> 00:24:02,480 Speaker 1: And you know what, three interest rates coming next year 416 00:24:02,480 --> 00:24:05,840 Speaker 1: and one more this year. And we're so short term 417 00:24:05,920 --> 00:24:08,760 Speaker 1: financed in terms of our our bar and as a country, 418 00:24:09,680 --> 00:24:14,639 Speaker 1: ultimately we're gonna get bitten by the and so you know, 419 00:24:15,080 --> 00:24:19,119 Speaker 1: the Kents also need to compromise. You know, the Senate 420 00:24:19,240 --> 00:24:22,560 Speaker 1: was designed to force compromise. That's what the Philip was 421 00:24:22,600 --> 00:24:24,960 Speaker 1: all about. Let's sleep with their Sunday. We're gonna have 422 00:24:24,960 --> 00:24:27,320 Speaker 1: to cut you off, thank you so much. The former 423 00:24:27,400 --> 00:24:33,159 Speaker 1: Senator of Oklahoma, Mr Coburn, he notes Sooner's twenty nine Longhorns. 424 00:24:34,440 --> 00:24:48,520 Speaker 1: This is Bloomberg. I'm looking at Eco go on the 425 00:24:48,560 --> 00:24:51,480 Speaker 1: Bloomberg time. I see the Empire Manufacturing Index out this 426 00:24:51,640 --> 00:24:54,960 Speaker 1: morning coming and higher than expectations thirty point to survey 427 00:24:55,000 --> 00:24:56,720 Speaker 1: twenty point four. Help me make some sense of this, 428 00:24:56,760 --> 00:24:59,560 Speaker 1: and then we can get near Dwight. And it's really 429 00:24:59,600 --> 00:25:02,359 Speaker 1: good to dearman Barbish this. Let me describe the chart 430 00:25:02,760 --> 00:25:06,560 Speaker 1: and I will put this out on uh on on 431 00:25:06,720 --> 00:25:09,280 Speaker 1: Twitter for all of you Bloomberg Radio seeing it first, 432 00:25:09,359 --> 00:25:12,720 Speaker 1: and you know, I gotta say, folks, it's to me 433 00:25:12,840 --> 00:25:16,280 Speaker 1: a tertiary data point. It's like me too, and every 434 00:25:16,359 --> 00:25:18,440 Speaker 1: single bank has to do this. I believe they do 435 00:25:18,520 --> 00:25:21,840 Speaker 1: it out of Buffalo for the New York FED. But 436 00:25:22,000 --> 00:25:24,639 Speaker 1: the answer is it's got a lot of information to it. 437 00:25:24,840 --> 00:25:30,160 Speaker 1: It is solid through two standard deviations going back fifteen years. 438 00:25:30,240 --> 00:25:32,680 Speaker 1: It's the first time it's ever done that, which is 439 00:25:32,720 --> 00:25:35,240 Speaker 1: a good reason to bring in Neriman Barbish, always an 440 00:25:35,280 --> 00:25:40,640 Speaker 1: optimist with HS Global Insight. They did terrific uh work, Neriman. 441 00:25:40,960 --> 00:25:46,800 Speaker 1: I mean I don't really I I don't say that often, no, 442 00:25:46,920 --> 00:25:50,520 Speaker 1: but that I've got a series back fifteen years. That's 443 00:25:50,600 --> 00:25:56,960 Speaker 1: two standard deviations optimistic. Is the FED behind I I 444 00:25:57,080 --> 00:26:00,840 Speaker 1: don't think so, Tom. I think I mean, this is 445 00:26:00,920 --> 00:26:04,320 Speaker 1: just sort of corroborates other data that we have that 446 00:26:04,480 --> 00:26:08,080 Speaker 1: suggests that the economy is on very solid footing. So 447 00:26:08,280 --> 00:26:11,119 Speaker 1: I think this is I don't you know, we can 448 00:26:11,200 --> 00:26:15,040 Speaker 1: debate about the pluses and minuses of various indicators, but 449 00:26:15,160 --> 00:26:17,359 Speaker 1: I think they're all pointing in the same direction, and 450 00:26:17,440 --> 00:26:19,760 Speaker 1: I think that's where the Fed's coming from. In the end. 451 00:26:20,560 --> 00:26:23,600 Speaker 1: Is it behind? You know, I don't think sup. Until recently, remember, 452 00:26:23,640 --> 00:26:25,560 Speaker 1: we were all worried about, you know, the strength of 453 00:26:25,600 --> 00:26:28,280 Speaker 1: its recovery, but all of a sudden, it's starting to 454 00:26:28,400 --> 00:26:31,359 Speaker 1: look like it's it's doing fairly well. So no, I 455 00:26:31,600 --> 00:26:33,760 Speaker 1: don't think that's a fair assessment of where that F is. 456 00:26:34,000 --> 00:26:36,280 Speaker 1: I mean, we're not back to the high seen in 457 00:26:36,359 --> 00:26:39,080 Speaker 1: two thousand four David Gura, but we're getting there rapidly. 458 00:26:39,160 --> 00:26:42,200 Speaker 1: I mean, it's been on a diffusion index basis around zero. 459 00:26:42,680 --> 00:26:46,200 Speaker 1: We've gone from minus eighteen to plus thirty, which is 460 00:26:46,240 --> 00:26:48,720 Speaker 1: a whole move nearon. Let me ask you what you 461 00:26:48,880 --> 00:26:52,199 Speaker 1: heard from the chorus of policymakers and bankers who were 462 00:26:52,240 --> 00:26:55,280 Speaker 1: gathered in Washington last week, and over the weekend we 463 00:26:55,359 --> 00:26:57,440 Speaker 1: had even as we've been discussing the IMF World Bank 464 00:26:57,480 --> 00:27:00,240 Speaker 1: annual meetings, there the Group of thirty banking for room 465 00:27:00,600 --> 00:27:02,840 Speaker 1: as well. What's the what are the themes that you 466 00:27:02,960 --> 00:27:06,600 Speaker 1: pulled out of those meetings? Well, I read a very 467 00:27:06,680 --> 00:27:10,399 Speaker 1: interesting piece on Bloomberg this morning that suggested there was 468 00:27:10,400 --> 00:27:14,360 Speaker 1: a split in this conference that the US policy makers 469 00:27:14,440 --> 00:27:19,600 Speaker 1: and US bankers were fairly optimistic, whereas European policy makers 470 00:27:20,240 --> 00:27:22,439 Speaker 1: and bankers who are much more cautious. And I think 471 00:27:22,480 --> 00:27:25,120 Speaker 1: that says something We've been We've been doing much better 472 00:27:25,200 --> 00:27:28,000 Speaker 1: than Europe for a sustained period of time, although we've 473 00:27:28,000 --> 00:27:30,639 Speaker 1: had our ups and downs, no question about it was 474 00:27:30,680 --> 00:27:33,440 Speaker 1: Europe is still struggling to some extent. Their banks are 475 00:27:33,560 --> 00:27:37,000 Speaker 1: not as good shape as US banks, and so so 476 00:27:37,119 --> 00:27:38,920 Speaker 1: there is a sort of split, if you will. The 477 00:27:39,240 --> 00:27:42,159 Speaker 1: Europeans worried as probably the way to say it, and 478 00:27:42,240 --> 00:27:45,359 Speaker 1: some of it because of political developments in in in 479 00:27:45,480 --> 00:27:48,080 Speaker 1: the past few days, having to do with Austrian the 480 00:27:48,080 --> 00:27:52,359 Speaker 1: Austrian election and so on, Catalonia, whereas in the US, 481 00:27:52,520 --> 00:27:53,920 Speaker 1: even though you know there has been a lot of 482 00:27:53,960 --> 00:27:58,159 Speaker 1: political uncertainty the senses that the economy, the banking sector 483 00:27:58,200 --> 00:28:01,480 Speaker 1: are all doing fairly well. This what's going on in Washington, 484 00:28:01,680 --> 00:28:05,200 Speaker 1: So quite a difference in mood here. Yeah, David Gard 485 00:28:05,240 --> 00:28:08,400 Speaker 1: mentioned Catherine Man, the O E c D. Said, yes, 486 00:28:08,440 --> 00:28:11,720 Speaker 1: she understood the optimism, and it's something that they bring 487 00:28:11,840 --> 00:28:14,480 Speaker 1: into their O E c D report in Paris. But 488 00:28:14,680 --> 00:28:18,720 Speaker 1: she was very cautious about all, you know, all multizing 489 00:28:18,840 --> 00:28:21,920 Speaker 1: and the idea of the cliche of an escape velocity 490 00:28:21,960 --> 00:28:24,240 Speaker 1: has been had. She really pushed against the near and 491 00:28:24,280 --> 00:28:27,240 Speaker 1: how much of of of that change in sentiment or 492 00:28:28,280 --> 00:28:31,160 Speaker 1: bifurcation of Senate has to do with the regulatory landscape 493 00:28:31,200 --> 00:28:33,000 Speaker 1: in each of these two places. Do do you think 494 00:28:33,040 --> 00:28:35,600 Speaker 1: that there is a broadly speaking more optimism about the 495 00:28:35,600 --> 00:28:39,480 Speaker 1: regulatory landscape here in the US then in Europe? You know, David, 496 00:28:39,520 --> 00:28:42,080 Speaker 1: I think that is a factor, There's no question. And 497 00:28:42,200 --> 00:28:45,640 Speaker 1: I think bankers and other industries in the US are 498 00:28:45,720 --> 00:28:49,320 Speaker 1: feeling that the UH they will be facing a friendly 499 00:28:49,440 --> 00:28:52,440 Speaker 1: or business friendly or regulatory environment in the next few 500 00:28:52,520 --> 00:28:55,560 Speaker 1: years compared with the last few years, whereas in Europe, 501 00:28:55,640 --> 00:28:59,560 Speaker 1: I think they set of the march towards greater regulation 502 00:28:59,720 --> 00:29:03,000 Speaker 1: is with unrelenting um so I think that is definitely 503 00:29:03,280 --> 00:29:06,360 Speaker 1: a factor. But I think, especially given that this was 504 00:29:06,480 --> 00:29:10,720 Speaker 1: a gathering of financiers and bankers, the health of the 505 00:29:10,840 --> 00:29:14,320 Speaker 1: US banking system is much better than the health of 506 00:29:14,400 --> 00:29:17,000 Speaker 1: the European banking system. Near an update your view on 507 00:29:17,200 --> 00:29:20,560 Speaker 1: investment in the next year, do we actually finally get 508 00:29:20,600 --> 00:29:24,560 Speaker 1: a list in corporate investment? I think the answer is 509 00:29:24,600 --> 00:29:28,720 Speaker 1: a cautious yes. And the reason is that global growth 510 00:29:28,920 --> 00:29:31,080 Speaker 1: is strong now, stronger than it was a while ago. 511 00:29:31,560 --> 00:29:35,000 Speaker 1: The dollar has lost some of its strength, It's come 512 00:29:35,040 --> 00:29:37,800 Speaker 1: down a bit, although in just the last few days 513 00:29:37,840 --> 00:29:41,280 Speaker 1: it's gone up a little bit. And so that combination 514 00:29:41,480 --> 00:29:44,360 Speaker 1: will will provide a couple of things. One is it 515 00:29:44,400 --> 00:29:49,040 Speaker 1: will make overseas profits of US companies UH greater value 516 00:29:49,440 --> 00:29:52,760 Speaker 1: m but but that it also provides an incentive for 517 00:29:53,040 --> 00:29:56,720 Speaker 1: companies to invest to meet foreign demand as well as 518 00:29:56,760 --> 00:30:00,440 Speaker 1: domestic demands. So our view is those two alone, aside 519 00:30:00,520 --> 00:30:03,560 Speaker 1: from the internal dynamics of the US, will help the 520 00:30:03,640 --> 00:30:05,920 Speaker 1: capital spending picture brighten a little bit. Now. I don't 521 00:30:05,920 --> 00:30:08,360 Speaker 1: want to get too carried away with the optimism, but um, 522 00:30:09,160 --> 00:30:10,960 Speaker 1: but hey, as you said at the beginning, I'm a 523 00:30:11,040 --> 00:30:17,959 Speaker 1: half glass of halfus. But but but I think there 524 00:30:18,000 --> 00:30:20,080 Speaker 1: are a number of key factors that will drive a 525 00:30:20,160 --> 00:30:23,880 Speaker 1: little better story on capitalist Let's do this. Let's come 526 00:30:23,920 --> 00:30:27,000 Speaker 1: back and be totally gloomy with their parish of hs 527 00:30:27,760 --> 00:30:30,600 Speaker 1: as we consider where we are in this economy, and 528 00:30:30,600 --> 00:30:33,760 Speaker 1: of course all of this front and center for the 529 00:30:33,920 --> 00:30:38,200 Speaker 1: FED calendar. Here on the middle of October, I should say, 530 00:30:38,400 --> 00:30:43,800 Speaker 1: six weeks away November one. Basically, Uh, David, I'm going 531 00:30:43,840 --> 00:30:47,040 Speaker 1: to say at this point in non event, I'd love 532 00:30:47,080 --> 00:30:50,320 Speaker 1: for that to change December, as we're all eyes are 533 00:30:50,400 --> 00:30:53,800 Speaker 1: directed as well, and so good. Two meetings to meetings. 534 00:30:54,000 --> 00:30:57,600 Speaker 1: The next meeting is uh, what it's the It's Halloween, 535 00:30:57,720 --> 00:31:00,600 Speaker 1: isn't it? I believe the next November, Lewyn, Yeah, I'm 536 00:31:00,600 --> 00:31:03,880 Speaker 1: working on my William mac chesney Martin Halloween all sat 537 00:31:04,000 --> 00:31:08,000 Speaker 1: Janet as we call that what I should say. What 538 00:31:08,120 --> 00:31:10,840 Speaker 1: a joy to see Stan Fisher at the IMF meetings, 539 00:31:11,280 --> 00:31:15,840 Speaker 1: his final weekend as vice Chairman of the Federal Reserve System. 540 00:31:16,120 --> 00:31:19,000 Speaker 1: This is Bloomberg. It is good to speak to Neriman 541 00:31:19,080 --> 00:31:22,680 Speaker 1: Bearish middle of October, setting up for the end of 542 00:31:22,720 --> 00:31:24,720 Speaker 1: the year and in the next year. He's with I 543 00:31:24,960 --> 00:31:27,080 Speaker 1: h S. What I love about I h S is 544 00:31:27,120 --> 00:31:32,200 Speaker 1: they usually have three frameworks. Their center tendency they're optimistic Nerriman, 545 00:31:32,280 --> 00:31:36,440 Speaker 1: bearish tendency, and then the gloom tendency wrought by those 546 00:31:36,680 --> 00:31:39,600 Speaker 1: worried and worried. He is three percent run rate g 547 00:31:39,800 --> 00:31:45,040 Speaker 1: d P and any of your three tendencies Nerriman, Well, 548 00:31:45,160 --> 00:31:48,760 Speaker 1: the answer is yes in the sense that briefly, if 549 00:31:48,800 --> 00:31:51,840 Speaker 1: there is a fair amount of stimulus that comes out 550 00:31:51,880 --> 00:31:56,400 Speaker 1: of Washington. I don't only give that about probability, but 551 00:31:56,480 --> 00:31:59,400 Speaker 1: if it comes out of Washington, and if it if 552 00:31:59,480 --> 00:32:02,480 Speaker 1: it's signed in a way that helps infrastructure, it helps 553 00:32:02,520 --> 00:32:08,360 Speaker 1: capital spending, uh, you know, grow at at a rapid pace, 554 00:32:08,760 --> 00:32:11,480 Speaker 1: then we could get to three. Probably not on a 555 00:32:11,600 --> 00:32:15,440 Speaker 1: sustained basis, but but for a few quarters. I think 556 00:32:15,480 --> 00:32:18,280 Speaker 1: that's very much in the car. But there's a big 557 00:32:18,320 --> 00:32:21,120 Speaker 1: provisor if we get the right kind of stimulus, if 558 00:32:21,200 --> 00:32:23,360 Speaker 1: we get the right kind of tax cut. And what 559 00:32:23,480 --> 00:32:25,120 Speaker 1: what does that look like to you? What is the 560 00:32:25,240 --> 00:32:27,240 Speaker 1: right kind of stimulus, the right kind of of tax 561 00:32:27,320 --> 00:32:29,240 Speaker 1: cut is it? Is it anything like what's being bandied 562 00:32:29,240 --> 00:32:33,360 Speaker 1: about in Washington today. Well, as you well know, it 563 00:32:33,520 --> 00:32:37,240 Speaker 1: quickly gets political. I think in the end, you know 564 00:32:37,320 --> 00:32:39,680 Speaker 1: what's really required. You know, as we were talking about 565 00:32:39,680 --> 00:32:42,200 Speaker 1: in the prior segment, what's really missing been missing in 566 00:32:42,280 --> 00:32:45,920 Speaker 1: this recovery is capital spending. You know, the consumers doing 567 00:32:46,120 --> 00:32:50,640 Speaker 1: isn't her part. The capital spending has been very disappointing 568 00:32:50,680 --> 00:32:53,920 Speaker 1: in many respects, and in particular spending on all this 569 00:32:54,200 --> 00:32:57,480 Speaker 1: new technology that's being developed. So, you know, my hope 570 00:32:57,520 --> 00:33:03,200 Speaker 1: would be the kind of investment uh encouraging enhancing policies 571 00:33:03,320 --> 00:33:06,320 Speaker 1: via the tax code and via other kinds of provisions 572 00:33:06,440 --> 00:33:10,400 Speaker 1: that might uh in fact bring about this uh sort 573 00:33:10,400 --> 00:33:15,720 Speaker 1: of unleashing of animal spirits, unleashing of the desire on 574 00:33:15,760 --> 00:33:18,960 Speaker 1: the part of businesses to invest, an investment in particular 575 00:33:19,520 --> 00:33:22,200 Speaker 1: in a lot of these new technologies. What we've been 576 00:33:22,240 --> 00:33:25,320 Speaker 1: seeing is the tech sector is doing really well. I mean, 577 00:33:25,440 --> 00:33:27,920 Speaker 1: the sense of productivity growth is good. They're you know, 578 00:33:27,960 --> 00:33:30,440 Speaker 1: they're investing in all these new technologies. The rest of 579 00:33:30,480 --> 00:33:33,080 Speaker 1: the economy, which is by far the biggest part in 580 00:33:33,200 --> 00:33:35,520 Speaker 1: terms of businesses, has not been And that's really what 581 00:33:35,600 --> 00:33:37,920 Speaker 1: we want to change here. And I'm detected here over 582 00:33:37,960 --> 00:33:39,800 Speaker 1: these last few weeks, even maybe maybe a few months, 583 00:33:39,880 --> 00:33:43,160 Speaker 1: last few weeks, more conversation about the role that technology 584 00:33:43,200 --> 00:33:45,080 Speaker 1: is playing here are we are we seeing a seat 585 00:33:45,120 --> 00:33:47,720 Speaker 1: change moment here when policymakers are beginning to wrestle with 586 00:33:47,840 --> 00:33:52,040 Speaker 1: the kind of technological change you're describing, well, I think 587 00:33:52,120 --> 00:33:54,360 Speaker 1: the answer is yes, some of it is positive, some 588 00:33:54,520 --> 00:33:56,280 Speaker 1: of it is negative. I mean, I think there is 589 00:33:56,320 --> 00:34:00,720 Speaker 1: a concern rising in many quarters that the technology is 590 00:34:00,720 --> 00:34:04,400 Speaker 1: playing a bigger role but also has a bigger responsibility 591 00:34:04,720 --> 00:34:07,840 Speaker 1: in terms of you know, the news aspects or faith 592 00:34:07,920 --> 00:34:12,719 Speaker 1: news aspects, in terms of you know, making sure that 593 00:34:12,800 --> 00:34:16,480 Speaker 1: we're not quash squashing competition. A lot of worries about 594 00:34:16,880 --> 00:34:19,080 Speaker 1: the size of some of these companies. So I think, 595 00:34:19,800 --> 00:34:21,840 Speaker 1: I mean, the technology plays a big role in the 596 00:34:21,920 --> 00:34:23,960 Speaker 1: tech sector. I'm a big fan of the tech sector, 597 00:34:24,320 --> 00:34:26,319 Speaker 1: and yet you know, we have to start to look 598 00:34:26,320 --> 00:34:29,759 Speaker 1: at some of these issues because they are somewhat troubling. Yeah, 599 00:34:29,760 --> 00:34:33,160 Speaker 1: and there, I mean, I look at productivity in the 600 00:34:33,280 --> 00:34:36,239 Speaker 1: in the overlay of it and all arranging debates. It's 601 00:34:36,280 --> 00:34:38,480 Speaker 1: something folks are really focusing on. As the beginner of 602 00:34:38,600 --> 00:34:42,959 Speaker 1: coverage towards Davos in the World Economic Forum. What part 603 00:34:43,120 --> 00:34:48,000 Speaker 1: of the productivity mix has your attention is ending at all? 604 00:34:48,080 --> 00:34:51,520 Speaker 1: Including the new FED chairman. Hope The hope is the 605 00:34:51,560 --> 00:34:56,080 Speaker 1: word I use hope that productivity lifts. Well, there's no 606 00:34:56,239 --> 00:34:58,800 Speaker 1: question that we all hope productivity will lift, and it 607 00:34:58,960 --> 00:35:01,600 Speaker 1: clearly plays a big role in terms of the overall 608 00:35:01,680 --> 00:35:03,920 Speaker 1: growth and long term growth of the economy. And it 609 00:35:04,040 --> 00:35:07,000 Speaker 1: matters to the FED a huge amount of the said, 610 00:35:07,000 --> 00:35:09,320 Speaker 1: it's done a lot of studies on this very topic 611 00:35:09,840 --> 00:35:13,040 Speaker 1: over the last ten twenty years, you know, while Greenspan 612 00:35:13,200 --> 00:35:15,920 Speaker 1: was there after he left, and also on UM so 613 00:35:16,160 --> 00:35:18,600 Speaker 1: this is crucial. Now. How much the Fed itself can 614 00:35:18,680 --> 00:35:23,400 Speaker 1: do uh is really questionable in the sense that the 615 00:35:23,960 --> 00:35:26,839 Speaker 1: interest rate policy alone will not do it. A lot 616 00:35:26,960 --> 00:35:30,880 Speaker 1: depends on the economic environment, a lot depends on tax policy, 617 00:35:31,280 --> 00:35:35,120 Speaker 1: a lot depends on uncertainty. And this is the uncertainty factor, 618 00:35:35,200 --> 00:35:38,440 Speaker 1: which I think is a is a big deal. Policy uncertainty, 619 00:35:38,520 --> 00:35:42,120 Speaker 1: especially fiscal policy uncertainty, I'm convinced, has had a very 620 00:35:42,160 --> 00:35:45,239 Speaker 1: negative repect on capital spending. This is interesting you you 621 00:35:45,440 --> 00:35:50,440 Speaker 1: you would wait policy uncertainty is businessmen wait to see 622 00:35:50,880 --> 00:35:54,200 Speaker 1: what's going on in Washington, and you fold that right 623 00:35:54,280 --> 00:35:58,239 Speaker 1: into the productivity calculation. I think it is definitely a 624 00:35:58,400 --> 00:36:00,960 Speaker 1: part of it. I'm not saying it's the reason. I'm 625 00:36:01,040 --> 00:36:03,560 Speaker 1: all I'm saying is right now. It is a factor 626 00:36:03,760 --> 00:36:07,640 Speaker 1: because businesses, partly because of you know, the big recession 627 00:36:07,680 --> 00:36:10,120 Speaker 1: we went through a few years ago, but also partly 628 00:36:10,200 --> 00:36:12,760 Speaker 1: because of a lot of toing and throwing on fiscal policy, 629 00:36:13,239 --> 00:36:16,080 Speaker 1: have been rather cautious in terms of what they do. 630 00:36:16,239 --> 00:36:20,160 Speaker 1: They're not sure for examples environment that go with that. 631 00:36:20,320 --> 00:36:22,560 Speaker 1: But isn't the CFO of a company a lot more 632 00:36:22,600 --> 00:36:27,960 Speaker 1: concerned about the artificial construct known as a yield curve? Now, 633 00:36:28,040 --> 00:36:32,239 Speaker 1: there's there's no question that financing is crucial here. But 634 00:36:32,600 --> 00:36:35,000 Speaker 1: but but but bear with me, Tom is you know, 635 00:36:35,440 --> 00:36:38,520 Speaker 1: the interest rates are very low right now, and even 636 00:36:38,560 --> 00:36:40,359 Speaker 1: if they're going to go up a little bit next year, 637 00:36:40,400 --> 00:36:42,880 Speaker 1: the financing environment is going to remain quite friendly for 638 00:36:42,960 --> 00:36:44,880 Speaker 1: a lot of companies. So the question is, so why 639 00:36:44,920 --> 00:36:48,319 Speaker 1: aren't they spending like Gangbus? And I have to believe 640 00:36:48,320 --> 00:36:50,239 Speaker 1: there are other factors at play here, and I think 641 00:36:50,600 --> 00:36:54,040 Speaker 1: I think the policy environment, fiscal policy environment is partly 642 00:36:54,080 --> 00:36:55,880 Speaker 1: to blame. I don't I don't want to over emphasize 643 00:36:55,920 --> 00:36:58,720 Speaker 1: that this thing is partly to blame. Let's look ahead 644 00:36:58,719 --> 00:37:00,520 Speaker 1: of here to to do that is mentioned you're out 645 00:37:00,560 --> 00:37:02,600 Speaker 1: with your your new outlook looking ahead to two thousand 646 00:37:02,680 --> 00:37:05,600 Speaker 1: to eighteen. How does the consumer look at this point 647 00:37:05,680 --> 00:37:08,000 Speaker 1: and how much of the health of the U. S. 648 00:37:08,080 --> 00:37:11,560 Speaker 1: Economy is balanced on his shoulders at this point. Well, 649 00:37:11,880 --> 00:37:15,359 Speaker 1: as we were saying earlier, the consumer is crucial here 650 00:37:16,400 --> 00:37:19,759 Speaker 1: of the economy. Good news is things are going well. Uh. 651 00:37:20,080 --> 00:37:22,680 Speaker 1: Income growth has been decent, Jobs growth has been decent. 652 00:37:23,480 --> 00:37:26,040 Speaker 1: A lot of households have seen their net worth rise, 653 00:37:26,120 --> 00:37:28,760 Speaker 1: not just because of the stock market, because the house 654 00:37:28,840 --> 00:37:31,120 Speaker 1: price is rising. Uh. And if you look at the 655 00:37:31,160 --> 00:37:34,279 Speaker 1: confidence surveys and consumers buy and large, yeah, it moves 656 00:37:34,360 --> 00:37:36,160 Speaker 1: up and down month to month. The buy and large 657 00:37:36,200 --> 00:37:39,160 Speaker 1: they're feeling pretty good about things. So this is good. 658 00:37:39,200 --> 00:37:42,239 Speaker 1: And I don't see that changing radically in the next 659 00:37:42,360 --> 00:37:45,279 Speaker 1: year or two unless inflation takes off or and the 660 00:37:45,360 --> 00:37:47,279 Speaker 1: FET has to really step on the brakes very hard. 661 00:37:47,400 --> 00:37:50,120 Speaker 1: So the good news is, I think the consumers. So 662 00:37:50,360 --> 00:37:53,640 Speaker 1: there is the bedrock basically of the of the U. S. Economy, 663 00:37:53,719 --> 00:37:57,080 Speaker 1: and and that foundation right now it's pretty solid. I'll 664 00:37:57,080 --> 00:37:59,800 Speaker 1: ask you lastly here just about the dollar and dollar 665 00:37:59,880 --> 00:38:02,480 Speaker 1: weakness and the role that's playing in your forecast as 666 00:38:02,520 --> 00:38:04,640 Speaker 1: you look ahead to two thousand eight. Do you have 667 00:38:04,680 --> 00:38:07,200 Speaker 1: a clear sense of what this administration's dollar policy is 668 00:38:07,239 --> 00:38:08,920 Speaker 1: and do you think we're going to see sustain weakness 669 00:38:10,560 --> 00:38:12,759 Speaker 1: in a In a word, no, I don't. I don't 670 00:38:12,800 --> 00:38:15,239 Speaker 1: have a good sense of where this administration is coming from, 671 00:38:15,320 --> 00:38:17,560 Speaker 1: because they've they've blown kind of hot and cold a 672 00:38:17,600 --> 00:38:19,560 Speaker 1: little bit on this. I think in the end they 673 00:38:19,560 --> 00:38:22,560 Speaker 1: wouldn't mind seeing the dollar a little bit weaker because 674 00:38:22,600 --> 00:38:25,480 Speaker 1: it will serve help exports, it will help narrow the 675 00:38:26,160 --> 00:38:30,400 Speaker 1: trade deficits in the United States. But again, there's not 676 00:38:30,560 --> 00:38:35,480 Speaker 1: a lot that either the Fed or the Treasury can 677 00:38:35,600 --> 00:38:38,080 Speaker 1: do about the dollars. The dollars very much market driven. 678 00:38:38,400 --> 00:38:41,680 Speaker 1: Unlike other economies like China's, we don't control our currency, 679 00:38:42,200 --> 00:38:44,800 Speaker 1: so we have to live with the the ups and 680 00:38:44,880 --> 00:38:47,840 Speaker 1: downs in the market. And up until very recently, people 681 00:38:47,920 --> 00:38:50,600 Speaker 1: were dollar bullish, but then they turned a little bit, 682 00:38:50,960 --> 00:38:54,840 Speaker 1: partly because of the strong growth overseas. People started shoot 683 00:38:54,920 --> 00:38:56,840 Speaker 1: their focus to other parts of the world, so the 684 00:38:56,920 --> 00:39:00,080 Speaker 1: dollar weakens. That was a miscall the summer by so 685 00:39:00,160 --> 00:39:02,640 Speaker 1: many people, and of course as we wander into a 686 00:39:02,800 --> 00:39:06,279 Speaker 1: seventy or eighty degree autumn, we keep waiting for the 687 00:39:06,400 --> 00:39:09,640 Speaker 1: turn dollars stronger. Here Over the recent days, the d 688 00:39:09,840 --> 00:39:12,960 Speaker 1: X y one nine shows that one week two week 689 00:39:13,000 --> 00:39:16,680 Speaker 1: dollar strengths we've seen Nerman BEARVERSH. Thank you so much, David. 690 00:39:16,760 --> 00:39:19,080 Speaker 1: That was great. He's without HS. I should say that's great. 691 00:39:19,120 --> 00:39:22,719 Speaker 1: I mean, just to pars Away. You can't do that enough, don't. 692 00:39:22,760 --> 00:39:25,239 Speaker 1: You can do it all the time, but you gotta 693 00:39:25,320 --> 00:39:28,800 Speaker 1: keep your eye on the basic economy dynamics. And I 694 00:39:28,840 --> 00:39:31,520 Speaker 1: don't have a strong view three two point eight percent. 695 00:39:32,440 --> 00:39:35,640 Speaker 1: We'll have to see that. The empire statistic that David 696 00:39:35,719 --> 00:39:49,839 Speaker 1: Gura mentioned earlier was buoyant to say that least. Thanks 697 00:39:49,880 --> 00:39:54,000 Speaker 1: for listening to the Bloomberg Surveillance podcast. Subscribe and listen 698 00:39:54,080 --> 00:39:59,680 Speaker 1: to interviews on Apple Podcasts, SoundCloud, or whichever podcast platform 699 00:39:59,760 --> 00:40:03,120 Speaker 1: you refer. I'm on Twitter at Tom Keene David Gura. 700 00:40:03,640 --> 00:40:07,320 Speaker 1: Is that David Gura before the podcast? You can always 701 00:40:07,400 --> 00:40:10,120 Speaker 1: catch us worldwide. I'm Bloomberg Radio.