WEBVTT - Credit Default Market Is Smaller Today, Eisman Says 0:00:09.720 --> 0:00:12.880 Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene with 0:00:13.560 --> 0:00:16.520 David Gura. Daily we bring you insight from the best 0:00:16.560 --> 0:00:22.239 of economics, finance, investment, and international relations. Find Bloomberg Surveillance 0:00:22.320 --> 0:00:27.000 on Apple Podcasts, SoundCloud, Bloomberg dot Com, and of course 0:00:27.320 --> 0:00:33.400 on the Bloomberg. Joining us now in our Bloomberg eleven 0:00:33.440 --> 0:00:35.479 three studios is Steve Iceman. He's a portfolio manager in 0:00:35.520 --> 0:00:37.000 New Burger Berman. Great to have you with us here 0:00:37.360 --> 0:00:39.040 once again. And I suppose we should start with the 0:00:39.080 --> 0:00:42.120 bank earnings. We had three major banks reporting last week. 0:00:42.159 --> 0:00:44.520 Two to come tomorrow. We have Goldman, sax and Morgan 0:00:44.560 --> 0:00:46.639 Stanley as well. Let's just take stock of what we've 0:00:46.680 --> 0:00:50.200 seen thus far. Earnings have come in line with the expectations. 0:00:50.200 --> 0:00:52.760 Of course, there's some quirkiness the third quarter earnings as well. 0:00:52.880 --> 0:00:54.560 What you've been watching is as the bank earnings have 0:00:54.640 --> 0:00:59.760 been coming in, Um, I've been ignoring them possible for what? 0:01:00.040 --> 0:01:03.280 For what reason? Do explain that? Completely irrelevant? How self? 0:01:04.720 --> 0:01:06.560 You know the bank artians will do whatever they'll be. 0:01:06.600 --> 0:01:09.960 They're very similar to the second quarter. Um, you know, 0:01:10.319 --> 0:01:13.880 the analysts will print what they print about who did 0:01:13.920 --> 0:01:15.839 a little better, who a little, a little little worse 0:01:16.040 --> 0:01:21.839 as completely meaningless. Because the big story is the deregulatory story, 0:01:22.160 --> 0:01:24.520 and that's that's going to be coming down the pike 0:01:24.600 --> 0:01:26.760 over the next six to nine months. Let's stick into 0:01:26.800 --> 0:01:29.600 that story a bit. A few months back, the Treasury 0:01:29.600 --> 0:01:35.040 Department released it's its first round of reports on on regulation, 0:01:35.480 --> 0:01:37.760 How it sees regulation, what what it intends or hopes 0:01:37.800 --> 0:01:40.120 to do with regard to to regulation. How clear a 0:01:40.240 --> 0:01:43.000 message on that front have we gotten from from this administration. 0:01:43.000 --> 0:01:44.600 We can talk a bit about what Gary Cone had 0:01:44.640 --> 0:01:47.240 to say over over the weekend, but is there clarity 0:01:47.240 --> 0:01:49.840 from this administration about how it would like to see 0:01:49.840 --> 0:01:55.640 that terrain change was It's as clear as day. Um. 0:01:55.680 --> 0:01:58.400 You know, I wear two hats. I wear the hat 0:01:58.480 --> 0:02:01.600 of American American citizen, and this is what I would 0:02:01.600 --> 0:02:06.080 do if I was God forbidden charge. Um. And then 0:02:06.120 --> 0:02:10.079 there's the hat of I'm not in charge. And it's 0:02:10.200 --> 0:02:11.880 very clear to me what the regulators are gonna do. 0:02:12.000 --> 0:02:13.840 What does that mean for bank stocks? I mean, if 0:02:13.919 --> 0:02:17.040 I was in charge, I would change very little. But 0:02:17.800 --> 0:02:23.280 I'm not in charge. And as as it is very obvious, um, 0:02:23.880 --> 0:02:27.120 And this is an administration that comes up with excuse 0:02:27.240 --> 0:02:31.840 after excuse about why Dodd Frank is bad, and they 0:02:31.880 --> 0:02:34.079 are not gonna be able to change, actually change Dodd 0:02:34.120 --> 0:02:36.800 Frank from a legislative perspective. So they're going to do 0:02:36.840 --> 0:02:39.600 it through the back door, through the regulatory process, because 0:02:40.160 --> 0:02:43.800 you know, Dodd Frank leaves a lot of them for interpretation. Um. 0:02:43.840 --> 0:02:47.080 You know, the prior regime under the OBAA administration was 0:02:47.160 --> 0:02:50.480 very very strict about the banks. They took leverage down enormously. 0:02:50.600 --> 0:02:55.919 They interpreted the vocal rule extremely strictly. Um, And you're 0:02:55.919 --> 0:03:00.000 going to see a partial reversal of what has happened. 0:03:00.080 --> 0:03:03.079 We're not gonna go anywhere close to where we were 0:03:03.200 --> 0:03:05.519 pre crisis. You know. Just to give you a couple 0:03:05.560 --> 0:03:07.799 of numbers, City Group used to be levered thirty three 0:03:07.840 --> 0:03:11.200 to one. Today it's levered ten to one. You know, 0:03:11.240 --> 0:03:13.639 my expectations over the next few years maybe it goes 0:03:13.720 --> 0:03:18.880 to thirteen fourteen to one, which would not be a calamity, um, 0:03:18.919 --> 0:03:21.080 but it would certainly make City Group a lot more profitable. 0:03:21.680 --> 0:03:23.640 And that's the direction we're gonna go in. It's going 0:03:23.680 --> 0:03:29.639 to happen in a very bureaucratese technocratic, complicated ways. So 0:03:29.720 --> 0:03:33.440 it's gonna be very hard for UM politicians to complain 0:03:33.480 --> 0:03:37.600 about it because they won't understand it. And that's intentional. Yeah, 0:03:38.240 --> 0:03:40.440 how how quickly can that happen? I look at the 0:03:40.720 --> 0:03:44.360 way that Dodd Frank came into being. Having lived in Washington, 0:03:44.400 --> 0:03:48.520 I for a time was noting the thousands and thousands 0:03:48.520 --> 0:03:52.040 of pages of comments letter implementing these rules, going from 0:03:52.080 --> 0:03:53.960 draft to draft to draft to final rule took a 0:03:53.960 --> 0:03:57.040 lot of time. If there is a lot of bureacrats, 0:03:57.040 --> 0:04:00.080 as you put it, does does that slow down the 0:04:00.120 --> 0:04:04.000 process at all? Help quickly in this come into play? Um, 0:04:04.040 --> 0:04:06.760 it will start to happen very quickly, but it's going 0:04:06.800 --> 0:04:09.400 to take about four years to actually happen. And what 0:04:09.440 --> 0:04:11.720 I mean by that is the FED regulates the banks 0:04:11.720 --> 0:04:15.080 to the annual stress test. Um, let's just say I 0:04:15.160 --> 0:04:17.040 think that's starting next year, they're going to grade on 0:04:17.080 --> 0:04:20.839 an easier curve, and so you will see a higher 0:04:20.839 --> 0:04:24.599 percentage of stock buy back and you'll see but but 0:04:25.040 --> 0:04:27.640 they're not going to let the banks buy back of 0:04:27.680 --> 0:04:29.919 them income. You know, this year, y, you're able to 0:04:29.920 --> 0:04:32.520 buy back a next year, I think there'll there'll be 0:04:32.560 --> 0:04:36.720 something like so leverls are gonna start to inch up, 0:04:36.839 --> 0:04:40.480 emphasis on inch, so you know it's going to take 0:04:40.520 --> 0:04:42.640 about a three or four years to to sort of 0:04:42.680 --> 0:04:47.120 move the leverage anywhere in any meaningful sense. Do we 0:04:47.240 --> 0:04:49.680 understand how big the banks are? One of the things 0:04:49.720 --> 0:04:53.160 I found over the years in the media is there's 0:04:53.160 --> 0:04:56.799 a complete misunderstanding of the scope and scale of these beasts. 0:04:57.800 --> 0:05:02.640 Revenue for JP Morgan Bill, revenue for City Group seventy billion, 0:05:03.080 --> 0:05:07.160 operating income twenty three plus thirty four. Between the two 0:05:07.240 --> 0:05:11.200 of them, they have something like fifty seven billion dollars 0:05:11.240 --> 0:05:15.000 of operating income down income statement, is that your advantage 0:05:15.000 --> 0:05:18.640 as an investor? Because we really don't understand the sheer 0:05:18.720 --> 0:05:23.839 mass of these beasts. I don't know if that's you know, 0:05:23.880 --> 0:05:27.040 people like to focus on that a lot um. You know, 0:05:27.320 --> 0:05:30.240 they're big because the economy is really big. I mean, 0:05:30.800 --> 0:05:33.520 so I don't pay all that much attention to it. 0:05:33.600 --> 0:05:35.039 You know. One of the reasons why the big banks 0:05:35.080 --> 0:05:37.919 are so big today is that during the height of 0:05:37.960 --> 0:05:42.480 the crisis um the regulators basically begged some of the 0:05:42.560 --> 0:05:45.680 larger banks to buy some of the other institutions. So 0:05:45.720 --> 0:05:49.600 Well's Fogleboat, Wacovia, um, you know, on and on and on. 0:05:49.760 --> 0:05:52.160 JP Morgan is bigger because of what bear Sterns and 0:05:52.480 --> 0:05:56.080 Carebuich other institution it boy, but it port something else. Um, 0:05:56.200 --> 0:05:58.760 so they were sort of stuck with it. But I 0:05:59.120 --> 0:06:02.560 don't focus all that much on the size issue. I 0:06:02.600 --> 0:06:05.240 focus much more on the leverage issue. Are we gonna 0:06:05.240 --> 0:06:10.040 see our regional bank mergers? I think if we do, 0:06:10.680 --> 0:06:13.640 you're gonna have to first. So the stress test starts 0:06:13.640 --> 0:06:17.680 at fifty billion in assets, So anybody in the stress 0:06:17.720 --> 0:06:23.560 test but meaning fifty billion up ain't merging. My expectation 0:06:23.680 --> 0:06:26.520 is that that level, that number will probably go up 0:06:26.560 --> 0:06:31.520 to something like two hundred billion, and when that happens, 0:06:32.200 --> 0:06:37.080 you'll begin to see some mergers or some some fairly 0:06:37.080 --> 0:06:39.440 significant size bags. But that's the first thing that has 0:06:39.480 --> 0:06:41.040 to happen. And to give you an idea of a 0:06:41.120 --> 0:06:44.599 fifty billion in the path, the two billion David City 0:06:44.600 --> 0:06:48.680 groups total assets are one thousand, eight hundred eight nine 0:06:48.760 --> 0:06:54.919 billion versus two. Again, the size issue is huge. I 0:06:54.960 --> 0:06:56.960 know that you and Tom we're talking on TV about 0:06:56.960 --> 0:06:58.840 these comments that Garry Cone made over the weekend at 0:06:58.839 --> 0:07:01.640 this Group of thirty confab in Washington, d C. He 0:07:02.279 --> 0:07:06.200 sounded declarion about clearing. He thought that that's particularly risky 0:07:06.240 --> 0:07:07.640 at this point. A couple of weeks back, we had 0:07:07.680 --> 0:07:10.320 the new chairman of the CFTC sitting in the seat 0:07:10.320 --> 0:07:14.120 you're sitting in now, and he painted a fairly rosy 0:07:14.160 --> 0:07:16.280 picture of his institution in the work that it's doing, 0:07:16.360 --> 0:07:19.200 while commenting on the size, the immense size of the 0:07:19.360 --> 0:07:25.120 derivatives marketplace. How at risk is that apparatus, that regulatory apparatus, 0:07:25.200 --> 0:07:27.480 and how far have we come from the financial crisis 0:07:27.560 --> 0:07:31.120 to now in terms of the power imbued into the CFTC. 0:07:31.280 --> 0:07:33.720 And it's it's ability to regulate that that massive space, 0:07:37.080 --> 0:07:42.000 you know, it's this is not my area of actorities. UM. 0:07:43.040 --> 0:07:45.600 You know, I think the derivative market is safer today 0:07:45.640 --> 0:07:49.520 than it was, you know, the derivatives that you know, 0:07:49.640 --> 0:07:53.360 lots of different kinds of derivatives. As there's interest rate swaps, 0:07:53.440 --> 0:07:56.240 which I don't think anybody really has a problem with. UM. 0:07:56.360 --> 0:07:58.360 The area that was that was the problems credit to 0:07:58.440 --> 0:08:01.760 fault swaps. That's a lot smaller to say than it was. 0:08:02.080 --> 0:08:06.520 I I gave an example UM in two thousand and sixteen, 0:08:06.720 --> 0:08:13.040 between the end of January and February, the credit to 0:08:13.080 --> 0:08:15.679 fould swap spreads on Deutsche Bank went from a hundred 0:08:15.680 --> 0:08:19.040 basis points to three hundred basis points and people started 0:08:19.080 --> 0:08:21.600 to freak out about that because that's an awfully big 0:08:21.680 --> 0:08:24.440 move and reminded people of the crisis a little bit. 0:08:24.920 --> 0:08:27.680 And what they didn't know at the time was that 0:08:27.800 --> 0:08:32.480 the volume that was traded on that huge move was 0:08:32.559 --> 0:08:38.079 seventy five million dollars now and during pre crisis on 0:08:38.200 --> 0:08:40.360 such a move, the amount that would have been traded 0:08:40.360 --> 0:08:44.679 would have been ten billion dollars. So it just gives 0:08:44.720 --> 0:08:46.720 you an idea of how much smaller than the credit 0:08:46.800 --> 0:08:49.480 to fuld s market is today. Stee, thanks for the visit, 0:08:49.520 --> 0:08:54.320 Steve icewand with this new today as we look at 0:08:54.320 --> 0:08:59.559 bond markets and make note of his optimism. Overall his optimism, 0:08:59.679 --> 0:09:02.679 he also did not mention when Selena Gomez will appear 0:09:02.720 --> 0:09:06.880 with us to speak about Richard Taylor. And to that 0:09:08.240 --> 0:09:13.240 reply on Twitter, Aty reached out talked to people. Effort 0:09:13.720 --> 0:09:28.320 was she's a busy touring schedule. I was looking up 0:09:28.360 --> 0:09:33.880 Oklahoma here David grew up and the presidential vote, Pama yes, 0:09:34.120 --> 0:09:39.800 and then I present Secretary Clinton got twenty nine percent 0:09:39.880 --> 0:09:44.920 of the vote, which the President got six of the 0:09:45.000 --> 0:09:48.680 vote and Mr Johnson of the l Party got six 0:09:48.760 --> 0:09:51.280 percent of the vote. But I find it interesting that 0:09:51.480 --> 0:09:54.640 Secretary Clinton got less than thirty percent of the vote. 0:09:54.679 --> 0:09:57.720 I did not know that he could bring in now 0:09:57.960 --> 0:10:00.079 the former U. S. Senator from Oklahoma. He's here to 0:10:00.200 --> 0:10:03.840 a decade in the U S. Senate, medical doctor turned congressman, 0:10:03.880 --> 0:10:05.840 then Senator Tom Coburan joining us now on our phone lines. 0:10:05.880 --> 0:10:08.199 Tom quickly before I bring in the senator. One of 0:10:08.240 --> 0:10:10.640 my favorite things about him was in two thousand and fifteen, 0:10:10.679 --> 0:10:13.440 as his retirement date approached, he could tick off how 0:10:13.520 --> 0:10:15.400 many days he had left until he was able to 0:10:15.559 --> 0:10:18.600 leave the capital. A complex. Great to speak you this morning, 0:10:18.679 --> 0:10:20.680 Senator Cobourn. And let me ask you, as you've observed 0:10:20.720 --> 0:10:23.480 Washington since you left, over these last two years, how 0:10:23.600 --> 0:10:26.079 much has has changed? How much is the story of 0:10:26.240 --> 0:10:30.040 dysfunction of government in action the same as it was 0:10:30.080 --> 0:10:33.320 when you left in two thousand fifteen. Oh, I think 0:10:33.360 --> 0:10:35.679 it's the same. The last two years that I was 0:10:35.760 --> 0:10:38.240 in the Senate, there were seven amendments that were considered 0:10:38.280 --> 0:10:41.760 on the floor. Uh, I mean, you know, and I 0:10:41.880 --> 0:10:44.679 had several of those. Actually that was the last year. 0:10:45.040 --> 0:10:47.240 The year before that, I think there were twelve. So 0:10:47.400 --> 0:10:49.680 the Senate had been shut down by Harry Reid because 0:10:49.679 --> 0:10:52.280 they didn't want to take hard votes. Uh. And so 0:10:52.880 --> 0:10:55.679 it's a disease that both Republicans and the Democrats have 0:10:56.360 --> 0:10:58.760 is the next election is more important than the future 0:10:58.800 --> 0:11:01.920 of our country. And there are exceptions to that in 0:11:02.000 --> 0:11:04.880 both parties, but by and large, the vast majority of 0:11:04.960 --> 0:11:08.240 career politicians are more interested in the next election than 0:11:08.280 --> 0:11:10.200 there are in terms of fixing problems. And the reason 0:11:10.520 --> 0:11:12.439 what you even know that is who's working on the 0:11:13.120 --> 0:11:17.480 medicure default that's coming, or the SOB security default that's coming, 0:11:18.360 --> 0:11:22.520 or the SOB security disabilities already defaulted and we're stealing 0:11:22.600 --> 0:11:26.679 from regular social security. Now, who's working on those things? Nobody? 0:11:27.920 --> 0:11:31.520 And so it means what they're doing is short term thinking, uh, 0:11:31.960 --> 0:11:35.080 that is politically beneficial to one party or the other, 0:11:36.120 --> 0:11:38.360 and in the long run, all the rest of America, 0:11:38.400 --> 0:11:41.440 no matter which party is, loses. And that's why I left. 0:11:42.320 --> 0:11:44.480 Nothing was happening there that was going to fix the 0:11:44.559 --> 0:11:47.959 real diseases, the real disease of our country, which is 0:11:48.679 --> 0:11:51.439 we're spending money we don't have. We promised benefits that 0:11:51.520 --> 0:11:54.480 we can't pay, and nobody wants to fess up and 0:11:54.559 --> 0:11:57.520 start addressing man. How much of this is the responsibility 0:11:57.520 --> 0:11:59.920 of leadership? You mentioned that Senator read there if you 0:12:00.080 --> 0:12:02.160 moments ago. Now, Mitch McConnell's in office, and in these 0:12:02.200 --> 0:12:04.280 recent days we fre from a number of conservative groups 0:12:04.320 --> 0:12:06.920 saying he needs to go. The Republican Party in the 0:12:06.960 --> 0:12:09.400 Senate shouldn't be led by by Senator Mitch McConnell. It's 0:12:09.440 --> 0:12:12.280 time for some some new blood, some new leadership. How 0:12:12.360 --> 0:12:14.080 confident are you that if he were to leave, if 0:12:14.160 --> 0:12:16.480 somebody knew where to lead the party in the Senate, 0:12:16.559 --> 0:12:19.600 we might see some of the changes you describe. I'm 0:12:19.640 --> 0:12:22.679 not I'm not confident of that. I'm not sure. You know. 0:12:23.280 --> 0:12:25.880 I would tell you that the vast majority of the 0:12:25.960 --> 0:12:31.920 Senate this career politicians. That's what they went into. I mean, 0:12:32.000 --> 0:12:34.560 they may have some limitsed work to experience very early 0:12:34.640 --> 0:12:36.439 in their careers, but most of them that's all I've 0:12:36.480 --> 0:12:39.800 ever done. So I'm not certain that will happen. I 0:12:39.880 --> 0:12:45.480 think you know, we're we're divided geographically, were divided, uh socially, 0:12:46.080 --> 0:12:51.120 were divided fiscally. Uh. People who pay a small amount 0:12:51.160 --> 0:12:54.560 of tax thinks their taxes are too high. People who 0:12:54.640 --> 0:12:56.760 pay a whole lot of tax I think their taxes 0:12:56.800 --> 0:12:59.719 are too high. But nobody's asking the question, what's the 0:13:00.000 --> 0:13:03.640 acts that's gonna come on our children and grandchildren by 0:13:03.800 --> 0:13:07.160 they're in action right now, so there's going to be 0:13:07.760 --> 0:13:10.280 It's amazing at the amount. You know, it's a hundred 0:13:10.320 --> 0:13:14.320 and twenty four threion dollars of unfunded liabilities it's going 0:13:14.400 --> 0:13:19.240 to be due over the next fifty years. Well, Senator, 0:13:19.559 --> 0:13:21.559 I think one of the great things about you, in 0:13:21.679 --> 0:13:25.920 an oddity and rarity among human conditions, including our lovelies 0:13:26.000 --> 0:13:28.599 on Capitol Hill, is the idea you went back and 0:13:28.679 --> 0:13:32.760 got a medical degree at age thirty five? Is that right? Yeah? 0:13:32.960 --> 0:13:34.720 I mean that's something I think a lot of people 0:13:34.760 --> 0:13:37.080 look at and are you kidding me? That's just outstanding. 0:13:38.080 --> 0:13:43.840 Where where do we go to get to compromise needed 0:13:43.960 --> 0:13:48.440 for these big pieces of legislation right now Monday morning, 0:13:48.840 --> 0:13:51.760 we're looking at the failure in AFTA, We're looking at 0:13:51.840 --> 0:13:55.480 some form of regurgitation of the Affordable Care Act, and 0:13:55.559 --> 0:14:00.520 the mystery attacks reform and and the nation all of 0:14:00.600 --> 0:14:05.079 our listeners of all political persuasions are begging, begging for 0:14:05.400 --> 0:14:11.280 doers like you are they left standing on Capitol Hill. No, 0:14:11.520 --> 0:14:16.560 I healthcare is going to fix itself, and that's because 0:14:16.760 --> 0:14:21.520 greed conquerors technologic difficulties. And what we know is one 0:14:21.600 --> 0:14:24.720 out every three dollars spent in healthcare today doesn't help anybody, 0:14:25.280 --> 0:14:28.320 doesn't prevent him from getting well then, but doesn't prevent 0:14:28.400 --> 0:14:30.560 him from getting sick, and doesn't cure him when once 0:14:30.640 --> 0:14:34.400 they are. So that's about one point three trillion dollars. 0:14:35.840 --> 0:14:39.000 And the one thing that's never happened since before World 0:14:39.080 --> 0:14:43.400 War Two is we've never had real market forces working 0:14:43.480 --> 0:14:48.040 because there's been no price discovery. And so one of 0:14:48.120 --> 0:14:50.360 the things I would suggest, if the Congress is gonna 0:14:50.400 --> 0:14:55.920 do anything, just mandate price transparency everywhere. And well, did 0:14:56.160 --> 0:15:00.440 you laud the President for pushing this Debate Act to 0:15:00.640 --> 0:15:06.280 people like you? Sure? Look, I travel around talking about 0:15:06.320 --> 0:15:08.400 this all the time. I know a company in Tulsa, 0:15:08.400 --> 0:15:10.480 Oklahoma is saving a quarter of a million dollars a 0:15:10.520 --> 0:15:15.400 month right now, just based on price transparency, based on 0:15:15.520 --> 0:15:18.760 an app that somebody developed to give them price transparency 0:15:18.840 --> 0:15:23.080 for their employees. And so so you know, that's that's 0:15:23.160 --> 0:15:26.640 three million bucks a year in their healthcare costs. And 0:15:26.840 --> 0:15:30.680 so what my experience, tom is I delivered about Oh, 0:15:30.760 --> 0:15:33.720 I don't know how many hundred Amish babies and took 0:15:33.760 --> 0:15:36.680 care of Amish families, and they always bought health care 0:15:36.760 --> 0:15:39.880 about thirty or five or less than everybody else because 0:15:39.920 --> 0:15:44.160 they went and found out prices before they bought. And 0:15:44.320 --> 0:15:48.560 so if we would just have price transparency all of 0:15:48.640 --> 0:15:51.920 a sudden, you know, Working's put out of an article 0:15:52.000 --> 0:15:54.800 in late April about the lack of competition of the 0:15:54.880 --> 0:15:58.680 large hospital chains and how they increased the cost and 0:15:58.840 --> 0:16:02.840 how we ought to have a significant antitrust activity going 0:16:02.920 --> 0:16:07.280 after the large both nonprofit and profit based hospitals and 0:16:07.480 --> 0:16:10.320 what that would do. The Federal Trade Commission has said 0:16:10.320 --> 0:16:12.680 the best care in the country at the lowest prices 0:16:12.760 --> 0:16:15.320 the position to owned hospitals. They've been banned under the 0:16:15.360 --> 0:16:20.120 Affordable CARA. I mean, let's let markets work, and if 0:16:20.200 --> 0:16:23.480 we would, then what we would start seeing as ways 0:16:23.600 --> 0:16:25.760 for people to figure out how to buy it cheaper. 0:16:26.080 --> 0:16:28.840 What do you and we need a safety that I'm 0:16:28.880 --> 0:16:31.280 not benign that we need safety that we can do that, 0:16:31.480 --> 0:16:33.760 but we don't you know. What we need is the 0:16:33.840 --> 0:16:36.520 prices to come down, and transparency in terms of price 0:16:36.640 --> 0:16:39.760 discovery will force a lot of that. What do you 0:16:39.800 --> 0:16:43.440 say to the individual who has been relying on those 0:16:43.480 --> 0:16:45.480 cost sharing steps these we see the President kicking this 0:16:45.600 --> 0:16:47.240 over to Congress. It's up to them now whether or 0:16:47.240 --> 0:16:49.600 not to appropriate that money. But there's some concern that's 0:16:49.640 --> 0:16:52.080 not going to happen. You describe the inaction on the 0:16:52.160 --> 0:16:56.120 Capitol Hill. Uh. Is that person not imperiled by what's 0:16:56.160 --> 0:16:59.680 happened here? Yes, they are. But here here's a couple 0:16:59.720 --> 0:17:01.720 of things that are happening. Number one is they can 0:17:01.800 --> 0:17:05.159 lower their cost by raising their deductible even further. And 0:17:05.240 --> 0:17:08.040 if you had price discovery, most of that expense isn't 0:17:08.040 --> 0:17:10.840 going to be paid. Uh. They'll give you example that 0:17:11.040 --> 0:17:14.080 the typical hospital based m r I for the spine 0:17:14.880 --> 0:17:18.800 is about four thousand bucks. In a free standing clinic 0:17:19.119 --> 0:17:22.840 that does imaging it's about five So you see in 0:17:22.920 --> 0:17:26.359 about seven to eightfold increasing costs. So if in fact 0:17:26.400 --> 0:17:29.560 they could actually see what things cost, they're out of pocket. 0:17:29.640 --> 0:17:33.440 The other thing that's happening is direct primary care UM 0:17:34.040 --> 0:17:38.280 and David. The direct primary care for a family of 0:17:38.320 --> 0:17:41.119 four is about twenty dollars a year. That's everything except 0:17:41.160 --> 0:17:45.040 your hospitalization. So let them buy it. Let them buy 0:17:45.080 --> 0:17:49.879 a hospitalization only policy, and that's about half of what 0:17:50.000 --> 0:17:54.040 the average deductible is today, and they're well on their 0:17:54.080 --> 0:17:59.480 way to getting the preventative care shots, immunizations, getting stitched up, 0:17:59.680 --> 0:18:03.040 getting broken arm thing. In other words, market will work 0:18:03.160 --> 0:18:05.240 if we will allow and then we can create a 0:18:05.359 --> 0:18:09.520 real safety for those that don't have the mean. But 0:18:09.680 --> 0:18:12.880 remember this promise on Medicaid didn't gonna last because we're 0:18:12.880 --> 0:18:15.440 not gonna have money to make it last. One final question, 0:18:15.520 --> 0:18:17.920 if we could, senor very quickly here, how is the 0:18:18.000 --> 0:18:21.520 support for the president and the President's Oklahoma? Is the 0:18:21.600 --> 0:18:26.280 support us? It's solid, No, I think it's what he's 0:18:26.280 --> 0:18:29.520 done is created a real division of between what he 0:18:29.600 --> 0:18:32.200 says and what the press says. And of course most 0:18:32.240 --> 0:18:34.000 of the time they don't believe the press. I'm not 0:18:34.080 --> 0:18:36.600 sure they all the time they believe him, but I 0:18:36.720 --> 0:18:39.240 would tell you kind of throughout the country, what you 0:18:39.320 --> 0:18:41.359 see is those people who voted for him, even though 0:18:41.400 --> 0:18:44.280 at times they're embarrassed, they're still like the things that 0:18:45.200 --> 0:18:47.119 the good Senator from Oklahoma heard Tom's talk of the 0:18:47.119 --> 0:18:48.600 sooner has agreed to stay with us here for another 0:18:48.600 --> 0:18:51.400 block on for surveillance. Senator Tom Coping before we send 0:18:51.520 --> 0:18:52.879 Tom Coping with us on our phone lines. And I 0:18:52.920 --> 0:18:54.960 know you're on the Homeland Security Committee, Senator when you're 0:18:55.000 --> 0:18:56.520 when you're in the in the Senate, and I wanted 0:18:56.520 --> 0:18:59.359 to ask you just how you've observed the fallout from 0:18:59.400 --> 0:19:02.639 these storms in the Caribbean and UH and and what 0:19:02.760 --> 0:19:05.040 you make of the government response so far the present. 0:19:05.119 --> 0:19:07.760 Now nominating somebody intending to nominate somebody to be the 0:19:07.800 --> 0:19:11.680 next Secretary of Homeland Security. Well, I think that you know, 0:19:11.840 --> 0:19:15.280 they learned from the large tragedy in the previous Houston 0:19:15.359 --> 0:19:20.680 and New Orleans UH hurricane. The problem in Puerto Rico 0:19:20.920 --> 0:19:22.800 really wasn't getting the stuff there, it was getting it 0:19:22.880 --> 0:19:26.520 distributed once it got there, UH. And they just weren't 0:19:26.640 --> 0:19:30.120 capable drivers evidently to do it. But I think overall 0:19:30.160 --> 0:19:33.800 I get Homeland Security a good writing on how they responded, 0:19:34.000 --> 0:19:36.480 how they pre staged things knowing that was coming, and 0:19:36.560 --> 0:19:39.400 how they how they've got it dispensed. There's a long 0:19:39.480 --> 0:19:41.160 time to go, a long way to go with both 0:19:41.359 --> 0:19:48.400 Houston and UH, the Southern Florida and uh Puerto Rico. 0:19:48.480 --> 0:19:51.880 But overall, I think you know, those aren't easy things. 0:19:52.840 --> 0:19:55.119 Government sometimes has tasked to do things that are very 0:19:55.200 --> 0:19:58.920 very difficult. Something that that appears to be very difficult 0:19:58.960 --> 0:20:01.359 has been the relationship with between the Congress and the 0:20:01.440 --> 0:20:03.159 president over these last a few months. And I know 0:20:03.240 --> 0:20:06.040 that you enjoyed a fairly good relationship with the previous 0:20:06.080 --> 0:20:09.040 sit president. What what advice would you give this current 0:20:09.119 --> 0:20:11.760 president about working how to work with Congress? How do 0:20:11.840 --> 0:20:14.760 you make that relationship better? Is it piecemeal? Let's it 0:20:14.840 --> 0:20:16.760 go into the golf course one by one with with 0:20:16.920 --> 0:20:18.879 members of the senatories. There are a better way to 0:20:19.000 --> 0:20:23.600 understand how each of these institutions works and should work together. Well, 0:20:23.680 --> 0:20:25.840 I you know, I first of all, Donald Trump is 0:20:25.880 --> 0:20:30.640 a very complex, complicated guy, and uh it doesn't look 0:20:30.720 --> 0:20:34.120 like he's gonna learning theory, doesn't appreciate appear to work 0:20:34.200 --> 0:20:36.800 with him in terms of he does something good and 0:20:36.840 --> 0:20:39.119 then steps on it, does something good and steps on it. 0:20:39.760 --> 0:20:43.480 Uh So I'm not sure. I think you just kind 0:20:43.520 --> 0:20:45.440 of got to take you Here's here's a guy that's 0:20:45.480 --> 0:20:50.520 gonna pop off and probably not smartly, but still does it. 0:20:50.920 --> 0:20:55.160 And it seems to recover from his base anyway. When 0:20:55.240 --> 0:20:57.960 he does it, you know, I look deference and keeping 0:20:58.000 --> 0:21:00.720 your mouth shut is oftentimes I had the feel a 0:21:00.760 --> 0:21:04.760 problem with that myself, by the way. Uh, but you know, 0:21:05.359 --> 0:21:09.080 the real question is what are people's motives? And when 0:21:09.119 --> 0:21:11.800 you get into question the motives, then what your assumption 0:21:12.040 --> 0:21:16.800 is is, uh, you're you don't have that same motive. 0:21:16.840 --> 0:21:21.040 And I'd say most people have well are well intentioned. 0:21:21.119 --> 0:21:26.280 In the Congress, sometimes their politics gets in the way 0:21:26.320 --> 0:21:28.359 of that, and I think you know what you do 0:21:28.520 --> 0:21:31.440 is you count to ten before you react. And we 0:21:31.560 --> 0:21:33.800 haven't seen that much either from the President or other 0:21:33.840 --> 0:21:37.359 people that he's talking to. Does Oklahoma? Does Oklahoma have 0:21:37.400 --> 0:21:42.520 a sanctuary city? Not that I'm aware of. Yeah, I 0:21:42.640 --> 0:21:45.640 was gonna say they don't. How do we get your 0:21:45.720 --> 0:21:48.600 part of the your neck of the woods back together 0:21:48.800 --> 0:21:52.479 with other necks of the woods identified by sanctuary cities. 0:21:52.880 --> 0:21:58.600 How do we tom That's a great question. Uh. There, 0:21:58.760 --> 0:22:01.240 But they're not looking at the real disease. They're looking 0:22:01.280 --> 0:22:05.600 at the symptoms. Uh. The disease is rule of the law. 0:22:08.160 --> 0:22:11.200 And what people in Oklahoma said, we're not anti Hispanic, 0:22:11.280 --> 0:22:14.480 we're not anti anybody. But if you have a law, 0:22:14.760 --> 0:22:17.680 either change it and don't enforce it to eliminate it, 0:22:18.200 --> 0:22:21.359 but if it's on the books, enforce it. And the 0:22:21.680 --> 0:22:25.479 former President Obama was really bad about that. He they 0:22:25.720 --> 0:22:28.720 deferred on a lot of things that were not legal, 0:22:29.680 --> 0:22:33.600 they just didn't enforce them. And so what happened was 0:22:33.760 --> 0:22:35.800 is you got this big upright. I'll never forget the 0:22:35.880 --> 0:22:37.520 first time I ran for the Senate, one of the 0:22:37.600 --> 0:22:40.640 things I've heard the most was why didn't the rule 0:22:40.680 --> 0:22:44.720 of law being enforced? Because here's what ultimately happens. When 0:22:44.920 --> 0:22:48.240 the average Americans sees that the federal government doesn't enforce 0:22:48.320 --> 0:22:50.159 the laws that are on the book, then all of 0:22:50.240 --> 0:22:52.640 a sudden they start applying that themselves. Well it doesn't 0:22:52.640 --> 0:22:55.200 apply to them, then then these laws don't apply to me, 0:22:55.880 --> 0:22:58.119 and you have this breakdown. And it's one of the 0:22:58.240 --> 0:23:00.560 key things that allows the republic to a vibe is 0:23:00.720 --> 0:23:03.680 competence and the rule of law. So it's it's not 0:23:04.000 --> 0:23:07.600 you know, it's not an issue of race. It's an 0:23:07.680 --> 0:23:11.760 issue I think that's the problem. Would you suggest that 0:23:12.000 --> 0:23:14.879