1 00:00:00,120 --> 00:00:02,920 Speaker 1: Brought you by Bank of America, Mary Lynch. Investing in 2 00:00:03,000 --> 00:00:07,840 Speaker 1: local communities, economies and a sustainable future. That's the power 3 00:00:08,080 --> 00:00:12,360 Speaker 1: of global connections, Mary Lynch, Pierce Fenner and Smith Incorporated 4 00:00:12,760 --> 00:00:27,400 Speaker 1: Member s I p C. Welcome to the Bloomberg Surveillance Podcast. 5 00:00:27,840 --> 00:00:31,520 Speaker 1: I'm Tom Keene with David Gura. Daily we bring you 6 00:00:31,560 --> 00:00:36,600 Speaker 1: insight from the best in economics, finance, investment and international relations. 7 00:00:37,000 --> 00:00:41,600 Speaker 1: Find Bloomberg Surveillance on iTunes, SoundCloud, Bloomberg dot Com, and 8 00:00:41,680 --> 00:00:50,199 Speaker 1: of course on the Bloomberg Carl Weinberg joins us now 9 00:00:50,240 --> 00:00:53,880 Speaker 1: chief economist at High Frequency Economics, and Carl, I read 10 00:00:53,880 --> 00:00:56,440 Speaker 1: your notes regularly and with great interest, and you wrote 11 00:00:56,480 --> 00:00:59,320 Speaker 1: in a recent one here every country in this edition 12 00:00:59,360 --> 00:01:00,960 Speaker 1: of of Your Globe a lout look boils down to 13 00:01:01,000 --> 00:01:03,920 Speaker 1: a discussion of yield curve prospects. This is the overarching 14 00:01:03,960 --> 00:01:08,080 Speaker 1: theme here. Absolutely absolutely. I mean, we have quantitative easing 15 00:01:08,120 --> 00:01:10,959 Speaker 1: issues in Europe. The ECB is out of sovereign bonds 16 00:01:11,000 --> 00:01:13,959 Speaker 1: to buy. That's a problem. Uh. Negative bond yields are 17 00:01:14,120 --> 00:01:18,399 Speaker 1: unnatural and without the support of ECB buying are I 18 00:01:18,400 --> 00:01:21,360 Speaker 1: don't think they can persist. In the UK, we have 19 00:01:21,920 --> 00:01:25,800 Speaker 1: everywhere we have rising inflation concerns, although they really aren't. 20 00:01:25,880 --> 00:01:29,280 Speaker 1: Inflation figures out there at the core that suggested an 21 00:01:29,280 --> 00:01:32,399 Speaker 1: inflation problem, the markets perceiving it as such. And of 22 00:01:32,440 --> 00:01:34,240 Speaker 1: course we have the FED on the move, and the 23 00:01:34,240 --> 00:01:38,360 Speaker 1: correlations between long term bond yields abroad and what happens 24 00:01:38,400 --> 00:01:41,080 Speaker 1: to US treasury markets is close to a pent so 25 00:01:41,160 --> 00:01:44,240 Speaker 1: steepening yeld curbs everywhere out there, and the world doesn't 26 00:01:44,240 --> 00:01:46,720 Speaker 1: need this right now except maybe here in the United States. 27 00:01:46,800 --> 00:01:48,360 Speaker 1: We'll talk about the FED here in just a minute. 28 00:01:48,400 --> 00:01:49,880 Speaker 1: I want to ask you what you heard from Mario 29 00:01:49,960 --> 00:01:52,680 Speaker 1: Draggy last week. I remember a few meetings back, the 30 00:01:52,720 --> 00:01:55,480 Speaker 1: conversation really centered on scarcity, what what the e c 31 00:01:55,600 --> 00:01:57,880 Speaker 1: B was going to buy? How is that conversation shifted? 32 00:01:58,120 --> 00:02:02,320 Speaker 1: Mario is so slippery in his In his comments this week, 33 00:02:02,440 --> 00:02:06,640 Speaker 1: he talked about, you know, continued, continued bond purchases, you know, forever, 34 00:02:06,800 --> 00:02:09,400 Speaker 1: and that's certainly possible, but he nowhere in his statement 35 00:02:09,440 --> 00:02:12,400 Speaker 1: that he used the word sovereign bond or public sector 36 00:02:12,440 --> 00:02:15,400 Speaker 1: purchase program. And the reality is they're out of public 37 00:02:15,400 --> 00:02:17,720 Speaker 1: sector bonds to buy. They're now buying at the short end. 38 00:02:17,720 --> 00:02:20,079 Speaker 1: In Germany because there aren't enough long bonds for them 39 00:02:20,080 --> 00:02:22,760 Speaker 1: to buy as they step away, as they taper their 40 00:02:22,800 --> 00:02:27,120 Speaker 1: public sector purchasing program. As far as I'm concerned, quantitative 41 00:02:27,160 --> 00:02:30,280 Speaker 1: easing is dead alright because Bind Corporates is not QUI. 42 00:02:30,560 --> 00:02:32,680 Speaker 1: It changes the price of a single security, but not 43 00:02:32,720 --> 00:02:35,840 Speaker 1: the whole YO curve. Good morning everyone, Carl Weinberg with me, 44 00:02:35,880 --> 00:02:39,079 Speaker 1: and there David gur in Washington. What a day David 45 00:02:39,120 --> 00:02:41,840 Speaker 1: to be in Washington. Had no idea the scoring was 46 00:02:42,160 --> 00:02:48,720 Speaker 1: keeping creeping up on us. Carl, I I look at 47 00:02:48,760 --> 00:02:51,400 Speaker 1: all that's going on. There still has to be a 48 00:02:51,400 --> 00:02:53,880 Speaker 1: measurement of g d P. What is your colleague, Jim 49 00:02:53,960 --> 00:02:57,000 Speaker 1: say about the run rate of US g d P 50 00:02:57,120 --> 00:02:59,320 Speaker 1: as we go to this big Fed decision and then 51 00:02:59,320 --> 00:03:01,960 Speaker 1: on from there. You know, Tom, we have the very 52 00:03:02,040 --> 00:03:04,520 Speaker 1: very near term, the current quarter which is certainly shaping 53 00:03:04,600 --> 00:03:07,440 Speaker 1: up to be disappointing, but we have a medium term 54 00:03:07,480 --> 00:03:09,560 Speaker 1: growth running at about two and a quarter up to 55 00:03:09,600 --> 00:03:14,280 Speaker 1: two and three percent according to Jim Mosullivan's forecast. High Frequency, 56 00:03:14,320 --> 00:03:17,240 Speaker 1: you know, is looking at what the Trump administration has promised, 57 00:03:17,400 --> 00:03:19,519 Speaker 1: and we're a little bit more skeptical than the market 58 00:03:19,560 --> 00:03:21,560 Speaker 1: that we're going to get everything that has been in 59 00:03:21,600 --> 00:03:24,520 Speaker 1: the president's rhetoric. So Jim's added a half a percent 60 00:03:24,560 --> 00:03:26,760 Speaker 1: to GDP growth in the second half of this year 61 00:03:26,800 --> 00:03:29,120 Speaker 1: to account for something getting in there in terms of 62 00:03:29,120 --> 00:03:32,200 Speaker 1: infrastructure and so forth. But so far, and let me 63 00:03:32,240 --> 00:03:34,680 Speaker 1: say that this way, probably like many members of the 64 00:03:34,760 --> 00:03:38,040 Speaker 1: f O m C, there's no hard basis to change 65 00:03:38,080 --> 00:03:40,600 Speaker 1: the forecast for GDP based on what we've seen out 66 00:03:40,600 --> 00:03:43,320 Speaker 1: of the Trump administration so far. We'll see if we 67 00:03:43,320 --> 00:03:45,080 Speaker 1: get all the principles in place here. Because of the 68 00:03:45,120 --> 00:03:47,280 Speaker 1: snow for that for that two day meeting, maybe it'll 69 00:03:47,280 --> 00:03:49,840 Speaker 1: have to be done telephonically. But Carl, let me ask 70 00:03:49,880 --> 00:03:51,400 Speaker 1: you about something I read in the Times this morning, 71 00:03:51,440 --> 00:03:53,560 Speaker 1: Benjum and apple Bomb writing about the potential here for 72 00:03:53,600 --> 00:03:56,840 Speaker 1: a collision between the FED share and the President when 73 00:03:56,880 --> 00:03:59,800 Speaker 1: it comes to UH growth, when it comes to what 74 00:03:59,840 --> 00:04:01,560 Speaker 1: the FED is intending to do. What are we going 75 00:04:01,560 --> 00:04:02,960 Speaker 1: to see an impact if indeed they are on this 76 00:04:03,000 --> 00:04:06,040 Speaker 1: slow motion track for collision. Yeah, I think you've You've 77 00:04:06,080 --> 00:04:08,200 Speaker 1: really hit the nail on the head, David. We're looking 78 00:04:08,320 --> 00:04:11,840 Speaker 1: at a FED that has its mandate, and its mandate 79 00:04:12,080 --> 00:04:17,360 Speaker 1: is full employment and price stability, and as certainly Stanley Fisher, 80 00:04:17,400 --> 00:04:20,160 Speaker 1: FED vice chairman has said numerous times where we are 81 00:04:20,240 --> 00:04:23,719 Speaker 1: right now, we're just about at that point at nearly 82 00:04:23,760 --> 00:04:26,040 Speaker 1: four and a half percent unemployment and two and a 83 00:04:26,120 --> 00:04:29,720 Speaker 1: half percent price increases, that we've achieved our objectives. The 84 00:04:29,760 --> 00:04:32,800 Speaker 1: Fed has achieved its objectives. The President wants to see 85 00:04:32,839 --> 00:04:36,960 Speaker 1: more growth, wants to see lower unemployment. And that's that's 86 00:04:36,960 --> 00:04:39,839 Speaker 1: a conflict. And I think that it's going to be 87 00:04:40,120 --> 00:04:42,360 Speaker 1: certainly one of those you know, foot on the accelerator, 88 00:04:42,400 --> 00:04:44,760 Speaker 1: foot on the brake kind of challenges. To see where 89 00:04:44,760 --> 00:04:49,279 Speaker 1: we were when they raise rates Wednesday. Nothing happens, right, 90 00:04:49,839 --> 00:04:52,919 Speaker 1: it's when when when do you presume it begins to 91 00:04:53,000 --> 00:04:58,279 Speaker 1: actually have an effect where higher FED funds yelling rates 92 00:04:58,560 --> 00:05:03,800 Speaker 1: dampen the growth of the growth if you will. Yeah, well, 93 00:05:03,839 --> 00:05:06,240 Speaker 1: monetary policy takes a while to work. We know that. 94 00:05:06,600 --> 00:05:09,479 Speaker 1: And just in the traditional textbook sort of thing, you know, 95 00:05:09,560 --> 00:05:12,000 Speaker 1: monetary policy could take a year or eighteen months to 96 00:05:12,040 --> 00:05:15,560 Speaker 1: affect the economy, but it will affect the financial market sooner. 97 00:05:15,839 --> 00:05:17,640 Speaker 1: And this is you know what we're all sitting on 98 00:05:17,680 --> 00:05:19,800 Speaker 1: the edges of our seat waiting to see. You know 99 00:05:19,880 --> 00:05:22,520 Speaker 1: that the stock market and could look at this, and 100 00:05:22,520 --> 00:05:24,200 Speaker 1: the bond market could look at this and say, gee, 101 00:05:24,200 --> 00:05:26,159 Speaker 1: this is really bad. The feed is hiking rates. You 102 00:05:26,200 --> 00:05:28,640 Speaker 1: know that's going to cause a recession. Or they could 103 00:05:28,640 --> 00:05:30,200 Speaker 1: look at them at this and say, well, the FET 104 00:05:30,240 --> 00:05:32,599 Speaker 1: is hiking rates because the economy is good and we 105 00:05:32,600 --> 00:05:34,919 Speaker 1: should be stronger. And I have no way of predicting 106 00:05:34,920 --> 00:05:37,240 Speaker 1: how the market's going to go for this, but financial 107 00:05:37,320 --> 00:05:40,360 Speaker 1: conditions are where you'll see the first impact of FED policy, 108 00:05:40,640 --> 00:05:43,800 Speaker 1: not necessarily in real investment activity. Any chance they go 109 00:05:43,880 --> 00:05:46,320 Speaker 1: by more than a quarter point here, well, it's not 110 00:05:46,400 --> 00:05:49,240 Speaker 1: in our thinking, and we haven't gotten anything to suggest 111 00:05:49,320 --> 00:05:52,680 Speaker 1: that they're talking in those terms. But you know, anything 112 00:05:52,800 --> 00:05:56,479 Speaker 1: is possible. We're an unexplored territory. At the unemployment rate 113 00:05:56,480 --> 00:05:59,680 Speaker 1: where it is right now, pushing rapidly towards that four 114 00:05:59,720 --> 00:06:02,440 Speaker 1: and a half percent floor that everybody thinks is where 115 00:06:02,480 --> 00:06:05,599 Speaker 1: the bottom has to be, and showing no sign of stopping. 116 00:06:05,839 --> 00:06:08,359 Speaker 1: Look at the strong labor market. Anything is possible. But 117 00:06:08,440 --> 00:06:10,719 Speaker 1: it's not an hour thinking. Help us get out front 118 00:06:10,800 --> 00:06:12,799 Speaker 1: of the event of the week, which is a scoring 119 00:06:12,839 --> 00:06:15,520 Speaker 1: if you will, the Trump Care whatever you wanna call it, 120 00:06:15,920 --> 00:06:17,600 Speaker 1: and also the event of the week, which is David 121 00:06:17,640 --> 00:06:20,680 Speaker 1: Gurrow talking with Alice Rivlin, how does it. How does 122 00:06:20,760 --> 00:06:26,080 Speaker 1: Carl Weinberg use the Congressional Budget Office day to day, Well, 123 00:06:26,120 --> 00:06:29,039 Speaker 1: not very much in this particular instance. You know, they're 124 00:06:29,040 --> 00:06:31,640 Speaker 1: going to be one of many pieces of input into 125 00:06:31,640 --> 00:06:35,200 Speaker 1: a legislative process that only has part of its feet 126 00:06:35,279 --> 00:06:37,400 Speaker 1: on the floor with economics on the same floor as 127 00:06:37,440 --> 00:06:40,640 Speaker 1: economic fundamentals. So at the end of the day, what 128 00:06:40,720 --> 00:06:43,040 Speaker 1: the CBO comes up with is going to be political. 129 00:06:43,160 --> 00:06:46,080 Speaker 1: They are going to be other points of view. Um So, 130 00:06:46,400 --> 00:06:48,680 Speaker 1: I think it's just one more piece into the conversation 131 00:06:49,200 --> 00:06:51,520 Speaker 1: factory in just sort of what this legislation would mean 132 00:06:52,320 --> 00:06:55,160 Speaker 1: for the US economy. If we were to see Obamacare 133 00:06:55,200 --> 00:06:57,359 Speaker 1: removing something new put in what effect would that have 134 00:06:57,880 --> 00:07:00,440 Speaker 1: on the US economy? Well, David, you raised the ten 135 00:07:00,520 --> 00:07:02,599 Speaker 1: squin jillion dollar question, which is what's going to be 136 00:07:02,640 --> 00:07:05,520 Speaker 1: put in place on it simply pulling it out In 137 00:07:05,600 --> 00:07:08,040 Speaker 1: the legislation that's currently in front of us, there are 138 00:07:08,040 --> 00:07:10,600 Speaker 1: a number of unknown unknowns. I know you're gonna be 139 00:07:10,640 --> 00:07:13,720 Speaker 1: talking later about long term sustainability and social security and 140 00:07:13,760 --> 00:07:17,760 Speaker 1: medicare There are media tax consequences because taxes on high 141 00:07:17,840 --> 00:07:21,280 Speaker 1: ink tax tax taxes imposed on high income individuals the 142 00:07:21,320 --> 00:07:24,120 Speaker 1: upper end of the income distribution will be eliminated as 143 00:07:24,200 --> 00:07:26,720 Speaker 1: part of that, and that not only has an impact 144 00:07:26,760 --> 00:07:29,800 Speaker 1: on the economy and on the fiscal budget, but also 145 00:07:29,960 --> 00:07:33,840 Speaker 1: on the overall view of the fiscal hawks within the 146 00:07:33,880 --> 00:07:36,320 Speaker 1: Republican Party who will want to see at some point 147 00:07:36,560 --> 00:07:40,160 Speaker 1: these reductions and taxation paid for. So there are just 148 00:07:40,280 --> 00:07:42,960 Speaker 1: a lot of really great areas and where this conversation 149 00:07:43,000 --> 00:07:46,240 Speaker 1: goes from here, regardless of what CBO says this week, Well, 150 00:07:46,320 --> 00:07:49,160 Speaker 1: let's to talk about here Krol Weinberg high frequency economics 151 00:07:49,720 --> 00:07:52,400 Speaker 1: with us as well, David gurn Washington. David, what are 152 00:07:52,400 --> 00:07:54,720 Speaker 1: you doing down there? I mean you have you have 153 00:07:54,840 --> 00:07:58,200 Speaker 1: vice chair Revative well I adore and folks founded the 154 00:07:58,280 --> 00:08:00,720 Speaker 1: CBO with a lot of courage. Yeah, I mean, I 155 00:08:00,800 --> 00:08:02,200 Speaker 1: just a great opportunity to talk to you about that 156 00:08:02,240 --> 00:08:03,680 Speaker 1: and about the FED as well. And I'm gonna be 157 00:08:03,680 --> 00:08:06,240 Speaker 1: talking with Michael Hayden, the former director of the CIA 158 00:08:06,440 --> 00:08:08,680 Speaker 1: as well today. And uh, you know, we're looking ahead 159 00:08:08,720 --> 00:08:10,760 Speaker 1: to this visit tomorrow that scheduled at least chancel Arangla 160 00:08:10,800 --> 00:08:13,120 Speaker 1: Merkel is supposed to be here. If all goes according 161 00:08:13,120 --> 00:08:14,840 Speaker 1: to plan, I'll be outside the White House. They're anchoring 162 00:08:14,840 --> 00:08:17,560 Speaker 1: our coverage of her visit, but of course with the snow, 163 00:08:17,560 --> 00:08:19,680 Speaker 1: will see what happens, you know, if indeed she'll get here, 164 00:08:19,720 --> 00:08:21,680 Speaker 1: and if the news conference that they've scheduled with her 165 00:08:22,000 --> 00:08:24,920 Speaker 1: and present actually happens. I just saw twelve to twenty 166 00:08:24,920 --> 00:08:27,280 Speaker 1: four inches, Rob Carol and giving some dates here, but 167 00:08:27,560 --> 00:08:30,560 Speaker 1: a lot of different inches. I believe David gur Reagan 168 00:08:30,600 --> 00:08:34,640 Speaker 1: gets forty eight inches. Yeah, that's called a vechan exactly, 169 00:08:34,679 --> 00:08:37,760 Speaker 1: it's a hockey goals now it just drops within six 170 00:08:37,840 --> 00:08:42,800 Speaker 1: gates of American airlines. Carl, you want to comment on this, Tom, 171 00:08:43,000 --> 00:08:45,960 Speaker 1: The reason they invented weather forecasting was to make economic 172 00:08:46,000 --> 00:08:49,800 Speaker 1: forecasters look speed ice. Rob Caroline is the best, and 173 00:08:49,840 --> 00:08:52,599 Speaker 1: we'll have reports to Mr Caroline our lack of a 174 00:08:52,720 --> 00:08:56,400 Speaker 1: stereo weather guy through the morning, Carl Weinberg, Where this 175 00:08:56,480 --> 00:08:59,800 Speaker 1: with high frequency economics? Greg Villiers just published as no 176 00:09:00,080 --> 00:09:03,960 Speaker 1: moments ago and he goes to the gridlock in Washington. 177 00:09:04,320 --> 00:09:07,520 Speaker 1: How can we have gridlock in Washington if I have 178 00:09:07,559 --> 00:09:12,720 Speaker 1: a Republican Senate, a Republican House, and a Republican president. Wait, 179 00:09:12,760 --> 00:09:16,480 Speaker 1: look way, look gridlock? Did you like that? David like that? 180 00:09:17,559 --> 00:09:21,120 Speaker 1: At e c alright? The you know, I'm not a 181 00:09:21,160 --> 00:09:23,240 Speaker 1: political analyst, But you don't have to be a political 182 00:09:23,280 --> 00:09:26,120 Speaker 1: analyst to see that the Republican Party is really several 183 00:09:26,120 --> 00:09:29,920 Speaker 1: parties right now, with several different specific groups. The fiscal Hawks, 184 00:09:29,960 --> 00:09:32,240 Speaker 1: the Tea Party gang have their point of view, the 185 00:09:32,240 --> 00:09:34,400 Speaker 1: Conservatives have their point of view, and then there are 186 00:09:34,640 --> 00:09:37,560 Speaker 1: sub blends of each of the others um and they're 187 00:09:37,559 --> 00:09:39,880 Speaker 1: not united behind the President, who seems to be yet 188 00:09:39,920 --> 00:09:43,400 Speaker 1: another ilk of Republicans. So having all the different control 189 00:09:43,440 --> 00:09:45,720 Speaker 1: of all the different houses is no issurance of success 190 00:09:45,800 --> 00:09:48,240 Speaker 1: right now. And I think that's best illustrated on the 191 00:09:48,240 --> 00:09:51,000 Speaker 1: health care debate, where we have a real question marks 192 00:09:51,040 --> 00:09:52,800 Speaker 1: as to how to move forward and what we're supposed 193 00:09:52,840 --> 00:09:55,440 Speaker 1: to be accomplishing. Carl, I think what Greg Value is 194 00:09:55,440 --> 00:09:58,199 Speaker 1: getting at is that the markets were very enthusiastic after 195 00:09:58,240 --> 00:09:59,760 Speaker 1: the election. They thought there was a high chance that 196 00:09:59,840 --> 00:10:01,719 Speaker 1: some thing was many things we're gonna get done and 197 00:10:01,760 --> 00:10:04,040 Speaker 1: get done quickly. It seems like there's been a bit 198 00:10:04,080 --> 00:10:06,960 Speaker 1: of a reevaluation here, so less from the political perspective 199 00:10:07,000 --> 00:10:08,880 Speaker 1: or from the market's perspective. Have you seen that happen? 200 00:10:09,280 --> 00:10:12,320 Speaker 1: But we haven't seen it yet, David, But my colleague 201 00:10:12,360 --> 00:10:16,120 Speaker 1: Jim O'Sullivan, Chief US economists that High Frequency Economics hasn't 202 00:10:16,160 --> 00:10:19,520 Speaker 1: really budged his forecast very much for the economy since 203 00:10:19,559 --> 00:10:21,920 Speaker 1: the election day. We've he's added half a percent to 204 00:10:22,000 --> 00:10:24,440 Speaker 1: GDP growth in the second half of this year on 205 00:10:24,720 --> 00:10:26,520 Speaker 1: the view that something's going to get done on the 206 00:10:26,520 --> 00:10:29,760 Speaker 1: fiscal side, But overall his view of the economy remains 207 00:10:29,840 --> 00:10:31,640 Speaker 1: the same. The economy is strong, it was going to 208 00:10:31,760 --> 00:10:36,080 Speaker 1: remain strong with or without the Trump agenda, and it's 209 00:10:36,120 --> 00:10:37,800 Speaker 1: not going to move that much in the near term. 210 00:10:37,880 --> 00:10:40,040 Speaker 1: But then if what we're going to get here, and 211 00:10:40,120 --> 00:10:43,160 Speaker 1: Frankie it's more than just a domestic question, is a 212 00:10:43,360 --> 00:10:45,920 Speaker 1: drop in the new confidence. Part of this is the 213 00:10:45,960 --> 00:10:49,400 Speaker 1: animal spirits of confidence, of belief in what we've got. 214 00:10:49,960 --> 00:10:52,719 Speaker 1: Is what we're really going to see here is a 215 00:10:52,880 --> 00:10:58,200 Speaker 1: decline and that buoyancy since November eight. Absolutely, Tom, that's 216 00:10:58,240 --> 00:11:01,880 Speaker 1: the way that Jim sees the UH see this working 217 00:11:01,880 --> 00:11:05,680 Speaker 1: out the resolution between consumer confidence and business confidence that's 218 00:11:05,679 --> 00:11:09,280 Speaker 1: so high and economic indicators that are substantially lower than that. 219 00:11:09,520 --> 00:11:11,240 Speaker 1: At the end of the day, we think the confidence 220 00:11:11,280 --> 00:11:14,040 Speaker 1: indicators work their way back down towards the reality that 221 00:11:14,120 --> 00:11:16,520 Speaker 1: the economy is delivering and not the other way around. 222 00:11:16,640 --> 00:11:18,480 Speaker 1: How about buoyancy in oil prices. What are you and 223 00:11:18,559 --> 00:11:20,800 Speaker 1: Jim seeing when it comes to energy prices. We had 224 00:11:20,800 --> 00:11:23,559 Speaker 1: that DA we report last week on stockpiles, crewed stockpiles 225 00:11:23,559 --> 00:11:27,440 Speaker 1: that record highs. You see that changing pretty pretty brave 226 00:11:27,559 --> 00:11:31,040 Speaker 1: David talking about buoyancy as as prices are actually sinking 227 00:11:31,600 --> 00:11:35,800 Speaker 1: as more as we speak. I've been expecting oil prices 228 00:11:35,840 --> 00:11:39,080 Speaker 1: to go back down to fifty range for some time now. 229 00:11:39,320 --> 00:11:42,040 Speaker 1: The inventories are so high. You've got the sixty six 230 00:11:42,120 --> 00:11:44,440 Speaker 1: days of inventories in the O E C D countries 231 00:11:44,480 --> 00:11:47,800 Speaker 1: and normal is about fifty four. So that's twelve days 232 00:11:47,920 --> 00:11:51,439 Speaker 1: or half a billion barrels of oil sitting around and 233 00:11:51,480 --> 00:11:53,640 Speaker 1: waiting to be dumped on the market. You have tidle 234 00:11:53,679 --> 00:11:56,559 Speaker 1: oil producers coming back on. There's no way prices can 235 00:11:56,600 --> 00:11:59,480 Speaker 1: go anyway but down, and that's been our outlook. It's 236 00:11:59,480 --> 00:12:01,800 Speaker 1: a problem the emerging world that produces this. It's a 237 00:12:01,800 --> 00:12:05,520 Speaker 1: problem for Opeque, it's a problem for Russia. Something to 238 00:12:05,520 --> 00:12:08,880 Speaker 1: think about, David and Tom. As interest rates go up, 239 00:12:09,160 --> 00:12:12,600 Speaker 1: the ability to finance these inventories go down. So one 240 00:12:12,640 --> 00:12:15,480 Speaker 1: of our background views has been that as interest rates 241 00:12:15,520 --> 00:12:17,959 Speaker 1: go up, we're going to see liquidation of these inventories 242 00:12:18,080 --> 00:12:21,160 Speaker 1: and even more downward pressure arm prices. We need to 243 00:12:21,559 --> 00:12:24,160 Speaker 1: very quickly here turn to something more important. Are you 244 00:12:24,160 --> 00:12:28,160 Speaker 1: gonna put chains on your car as you moved north 245 00:12:28,280 --> 00:12:30,880 Speaker 1: from New York City? I am up in Rhinebeck, New 246 00:12:30,960 --> 00:12:33,160 Speaker 1: York Way north of the city. We're expecting two ft 247 00:12:33,160 --> 00:12:35,120 Speaker 1: of snow and I've got a four wheel drive vehicle 248 00:12:35,160 --> 00:12:37,559 Speaker 1: that goes to anything. Did you lose three fingers on 249 00:12:37,640 --> 00:12:41,560 Speaker 1: your left hand freezing? When you know years ago there's 250 00:12:41,559 --> 00:12:45,319 Speaker 1: always one piece of one rear tire chain that doesn't work. 251 00:12:46,080 --> 00:12:48,680 Speaker 1: You need to get out a blowtorch. I haven't. I 252 00:12:48,720 --> 00:12:50,800 Speaker 1: haven't had that experience. I haven't had chain since I 253 00:12:50,840 --> 00:12:52,360 Speaker 1: lived in Italy and I had to get my off 254 00:12:52,640 --> 00:12:55,360 Speaker 1: Romeo sportster into the Alps. Is a Southern Is a 255 00:12:55,400 --> 00:13:00,240 Speaker 1: Southern boy ever enjoyed chain, slush and salt? David on this. 256 00:13:00,400 --> 00:13:03,280 Speaker 1: I have never applied chains to a vehicle, but I've 257 00:13:03,280 --> 00:13:08,439 Speaker 1: seen them in action. Very good. We have chains coming up, folks. 258 00:13:08,440 --> 00:13:10,319 Speaker 1: We're gonna get a real What are you gonna get 259 00:13:10,320 --> 00:13:12,559 Speaker 1: carl up north? More than two feet? They're saying two 260 00:13:12,640 --> 00:13:14,920 Speaker 1: feet at least up where I am. That's what the 261 00:13:14,920 --> 00:13:17,880 Speaker 1: local forecasters are saying, and of course in the mountains, 262 00:13:17,880 --> 00:13:19,560 Speaker 1: it's probably gott to be more than that. Right at 263 00:13:19,559 --> 00:13:22,240 Speaker 1: the front of the cat Skills Storm Surveillance Center here 264 00:13:22,280 --> 00:13:24,280 Speaker 1: for us, we'll have much where Rob carroll and will 265 00:13:24,320 --> 00:13:27,160 Speaker 1: give us some perspective. And this is what Rob does best, 266 00:13:27,240 --> 00:13:30,400 Speaker 1: is these nor easters for those of you globally nor easters, 267 00:13:30,440 --> 00:13:32,280 Speaker 1: and I'm not gonna employ to the weather guy here, 268 00:13:32,280 --> 00:13:34,600 Speaker 1: but they have a life of their own. In any 269 00:13:34,679 --> 00:13:38,240 Speaker 1: forecasts are always with a big asterisk, like maybe we 270 00:13:38,320 --> 00:13:40,960 Speaker 1: sort of know what's gonna go on. But Rob Carollin 271 00:13:41,040 --> 00:13:45,000 Speaker 1: will give us perspective through today and whenever the snow 272 00:13:45,040 --> 00:13:46,840 Speaker 1: st gonna get some milk and bread, Tom, you're gonna 273 00:13:46,880 --> 00:13:49,000 Speaker 1: run out. Oh yeah, we've already done that. We've stuck. 274 00:13:49,280 --> 00:13:54,199 Speaker 1: We're down at Whole Foods. Everybody's stuck in twa water, milk, eggs, 275 00:13:54,240 --> 00:13:58,199 Speaker 1: twelve cane bed in the cal David in the produced 276 00:13:58,240 --> 00:14:01,959 Speaker 1: down at Columbus Circle with the kill It was this 277 00:14:02,080 --> 00:14:07,079 Speaker 1: big hole with the killer people that taken the Colchip's yeah, 278 00:14:07,160 --> 00:14:10,120 Speaker 1: Colin of the twins, he's stuck up at fourteen bags 279 00:14:10,480 --> 00:14:13,360 Speaker 1: of kil Chip. It's a storm coming. We'll have more 280 00:14:13,360 --> 00:14:30,840 Speaker 1: for your Bloomberg Radio Worldwide Time Keenan New York, David 281 00:14:30,880 --> 00:14:37,600 Speaker 1: Guru at the one FM News Bureau in Washington, and 282 00:14:37,640 --> 00:14:39,920 Speaker 1: you have a special guest, David. Yeah. The backdrop from 283 00:14:39,920 --> 00:14:42,080 Speaker 1: my visit here, obviously is the ongoing debate on Capitol 284 00:14:42,160 --> 00:14:45,880 Speaker 1: Hill about the new healthcare legislation, and we await eagerly 285 00:14:45,920 --> 00:14:48,720 Speaker 1: the report from the CBO, the score from the CBO, 286 00:14:49,040 --> 00:14:51,720 Speaker 1: to see what that organization has to say about that 287 00:14:51,760 --> 00:14:53,400 Speaker 1: piece of legislation might be. Again, its joints me here 288 00:14:53,400 --> 00:14:56,200 Speaker 1: in the studio. She's the president of the Committee for 289 00:14:56,280 --> 00:14:58,880 Speaker 1: Responsible Federal Budget. Great to have you here, mine. Let 290 00:14:58,880 --> 00:15:00,840 Speaker 1: me just start. We'll talk about death sits all that 291 00:15:00,880 --> 00:15:02,960 Speaker 1: in just a sect. But what's the role of the 292 00:15:02,960 --> 00:15:05,520 Speaker 1: CBO as you see it? You've heard the commentary about 293 00:15:05,520 --> 00:15:08,120 Speaker 1: it in recent weeks, some members the administration calling its 294 00:15:08,120 --> 00:15:10,800 Speaker 1: integrity into into questions. How do you regard the CBO, 295 00:15:10,840 --> 00:15:13,080 Speaker 1: how do you use the CBO? And how novel is this? 296 00:15:13,200 --> 00:15:16,160 Speaker 1: How different is it to hear its integrity called into question? 297 00:15:16,680 --> 00:15:19,720 Speaker 1: So the CBO plays an incredibly important role, I believe 298 00:15:19,800 --> 00:15:22,520 Speaker 1: because in a in a town, and in an environment 299 00:15:22,520 --> 00:15:24,600 Speaker 1: where things have become more and more partisan, more and 300 00:15:24,600 --> 00:15:27,000 Speaker 1: more political, and they're we're seeing kind of the ongoing 301 00:15:27,200 --> 00:15:32,240 Speaker 1: under mining of impartial institutions. To me, the Congressional Budget 302 00:15:32,280 --> 00:15:34,440 Speaker 1: Office is the one that I hold up as this 303 00:15:34,520 --> 00:15:38,400 Speaker 1: is an institution that is not political, that is analytical, 304 00:15:38,760 --> 00:15:40,520 Speaker 1: and the scores that it puts out. Of course they're 305 00:15:40,560 --> 00:15:43,640 Speaker 1: not perfect because they are doing major projections of major 306 00:15:43,720 --> 00:15:49,240 Speaker 1: economic and policy pieces of legislation, but they are unbiased 307 00:15:49,240 --> 00:15:52,200 Speaker 1: in their work, which is so important and critical at 308 00:15:52,200 --> 00:15:55,000 Speaker 1: a time when you have a hard time trusting the 309 00:15:55,000 --> 00:15:57,280 Speaker 1: two parties take on something and you really just want 310 00:15:57,320 --> 00:15:59,600 Speaker 1: to know what the numbers are. So I would say 311 00:16:00,000 --> 00:16:02,640 Speaker 1: CBO is one of I think the most important players 312 00:16:02,760 --> 00:16:06,160 Speaker 1: in keeping us honest and not political, and I've been 313 00:16:06,240 --> 00:16:08,520 Speaker 1: really disappointed, I have to say, and what I think 314 00:16:08,560 --> 00:16:11,960 Speaker 1: is a strategy of undermining their credibility. Instead of saying 315 00:16:12,240 --> 00:16:14,040 Speaker 1: we want numbers that are going to add up, or 316 00:16:14,080 --> 00:16:16,000 Speaker 1: if they give us a score that says this cost 317 00:16:16,040 --> 00:16:17,840 Speaker 1: more than we're supposed to, how do we go back 318 00:16:17,840 --> 00:16:21,960 Speaker 1: and improve the legislation. So I hope um that the 319 00:16:21,960 --> 00:16:25,360 Speaker 1: politics of undermining CBO will stop as quickly as possible. 320 00:16:25,760 --> 00:16:27,520 Speaker 1: Last week we had Gary Cohen, the head of the NBC, 321 00:16:27,560 --> 00:16:29,520 Speaker 1: speaking he said that we care about the deficit, we 322 00:16:29,560 --> 00:16:32,360 Speaker 1: care about revenue that from the administration. Do you take 323 00:16:32,400 --> 00:16:34,320 Speaker 1: him at face value? Have you seen evidence of that 324 00:16:34,400 --> 00:16:37,280 Speaker 1: here in these first six weeks of this administration. Well, 325 00:16:37,320 --> 00:16:39,640 Speaker 1: it's hard to see the evidence because the policies haven't 326 00:16:39,680 --> 00:16:41,960 Speaker 1: come out yet. Um. What I'm looking at is who's 327 00:16:41,960 --> 00:16:45,200 Speaker 1: saying what an administration? And I was very encouraged by 328 00:16:45,360 --> 00:16:48,400 Speaker 1: Director Cohen's remarks about how they don't want to make 329 00:16:48,400 --> 00:16:51,440 Speaker 1: the deficit worse over the next ten years. Um, and 330 00:16:51,520 --> 00:16:53,720 Speaker 1: let me just set the stage on that the deficit 331 00:16:53,840 --> 00:16:55,720 Speaker 1: is going to be made much worse than the next 332 00:16:55,720 --> 00:16:58,760 Speaker 1: ten years. If we do nothing, we're on track to 333 00:16:58,800 --> 00:17:01,360 Speaker 1: borrow nine trillion dollar over the next ten years. So 334 00:17:01,400 --> 00:17:03,160 Speaker 1: I interpreted his point of saying we're not going to 335 00:17:03,240 --> 00:17:05,399 Speaker 1: make that worse. I'd like to nudge them in a 336 00:17:05,400 --> 00:17:07,520 Speaker 1: different direction, which is we're actually going to make that better. 337 00:17:08,040 --> 00:17:11,480 Speaker 1: But I thought his remarks are very encouraging, particularly because 338 00:17:11,480 --> 00:17:13,800 Speaker 1: we've heard about a lot of policies that could and 339 00:17:13,920 --> 00:17:17,520 Speaker 1: would worsen the fiscal situation, whether it's healthcare if they 340 00:17:17,560 --> 00:17:20,200 Speaker 1: do get a bad score and proceed without worrying about that, 341 00:17:20,640 --> 00:17:22,680 Speaker 1: or tax or form if it were to lose revenue 342 00:17:22,760 --> 00:17:24,760 Speaker 1: or infrastructure if it wouldn't be very expensive and not 343 00:17:24,800 --> 00:17:27,560 Speaker 1: paid for. So I thought he'd put an important marker 344 00:17:27,600 --> 00:17:29,640 Speaker 1: down and was really pleased to see those cards. Help 345 00:17:29,680 --> 00:17:32,560 Speaker 1: me with the text credits. I mean, folks, I don't 346 00:17:32,600 --> 00:17:35,000 Speaker 1: want to get into the weeds on this debate, but 347 00:17:35,119 --> 00:17:38,120 Speaker 1: basically they want to shift the tax credits, and there's 348 00:17:38,119 --> 00:17:42,320 Speaker 1: an uproar that they're of minimal value to our truly 349 00:17:42,400 --> 00:17:45,680 Speaker 1: poor and needy people. My help us with your analysis 350 00:17:45,680 --> 00:17:48,800 Speaker 1: of tax credits. So what we're doing is we're switching 351 00:17:48,840 --> 00:17:52,240 Speaker 1: the way that we're creating the subsidies within our healthcare program. 352 00:17:52,240 --> 00:17:54,920 Speaker 1: And there's always going to be subsidies, because for instance, 353 00:17:54,920 --> 00:17:57,480 Speaker 1: the young are going to subsidize the old, the rich 354 00:17:57,480 --> 00:17:59,520 Speaker 1: are going to subsidize the poor. The question is to 355 00:17:59,560 --> 00:18:02,240 Speaker 1: what ex sent those will be true and what structure 356 00:18:02,359 --> 00:18:05,240 Speaker 1: we're using. This new replacement plan is going to be 357 00:18:05,280 --> 00:18:08,280 Speaker 1: dependent on tax credits, and there was a big fight 358 00:18:08,320 --> 00:18:11,959 Speaker 1: whether those tax credits should be refundable and whether they 359 00:18:11,960 --> 00:18:14,200 Speaker 1: should be refundable meaning that you would get them even 360 00:18:14,240 --> 00:18:17,000 Speaker 1: if you didn't pay income taxes, and advanceable meaning you 361 00:18:17,000 --> 00:18:19,280 Speaker 1: would get them in advance and they ended up creating 362 00:18:19,280 --> 00:18:21,960 Speaker 1: a plan that would include those, so those would help 363 00:18:22,000 --> 00:18:26,240 Speaker 1: people who are above the qualifying lines from Medicaid, but 364 00:18:26,320 --> 00:18:28,800 Speaker 1: on the much poorer side of the spectrum. There's been 365 00:18:28,840 --> 00:18:31,640 Speaker 1: a lot of pushback from the Conservatives, in particular because 366 00:18:31,680 --> 00:18:34,480 Speaker 1: they see that as a new form of entitlement spending. 367 00:18:34,760 --> 00:18:37,240 Speaker 1: And one of their purposes to repeal Obamacare in the 368 00:18:37,240 --> 00:18:40,040 Speaker 1: first place was they didn't like the entitlement nature of it. 369 00:18:40,080 --> 00:18:42,840 Speaker 1: They wanted to change that, so they're unhappy with those 370 00:18:42,840 --> 00:18:45,520 Speaker 1: refundable tax credits. This we could get what's called the 371 00:18:45,560 --> 00:18:48,320 Speaker 1: skinny budget. We had a broad overview from the White 372 00:18:48,359 --> 00:18:50,320 Speaker 1: House of what it wants. It's a budget to be 373 00:18:50,400 --> 00:18:52,880 Speaker 1: a couple of weeks back. Of course, the headline figure 374 00:18:52,880 --> 00:18:55,520 Speaker 1: there was that fifty four billion dollars in additional defense spending. 375 00:18:55,560 --> 00:18:58,880 Speaker 1: The administrations say they'd offset that with cuts to other programs. 376 00:18:58,920 --> 00:19:00,520 Speaker 1: How difficult is that going to be? You listen to 377 00:19:00,600 --> 00:19:02,440 Speaker 1: the President speak to the Joint Session of Congress. He 378 00:19:02,480 --> 00:19:04,879 Speaker 1: talked about doing away with the sequester. Is if it 379 00:19:04,880 --> 00:19:07,400 Speaker 1: could be done so easily by waiving a wand how 380 00:19:07,400 --> 00:19:09,720 Speaker 1: hard is that going to be? Uh? And what do 381 00:19:09,720 --> 00:19:11,720 Speaker 1: you make there? Over the desire to increase the defense 382 00:19:11,760 --> 00:19:16,000 Speaker 1: budget rather than uh, you know, cutting other programs. So 383 00:19:16,080 --> 00:19:17,920 Speaker 1: the first point about the skinny budget is it's going 384 00:19:17,960 --> 00:19:21,960 Speaker 1: to be really, really really skinny. Um emaciated in some 385 00:19:22,080 --> 00:19:24,560 Speaker 1: ways because normally when a new president comes in, they 386 00:19:24,600 --> 00:19:27,120 Speaker 1: do do a much smaller budget because they haven't had time. 387 00:19:27,160 --> 00:19:29,439 Speaker 1: Director Mulvaney hasn't been in place to put together a 388 00:19:29,440 --> 00:19:31,880 Speaker 1: full budget. But this one is only going to look 389 00:19:31,880 --> 00:19:35,920 Speaker 1: at the discretionary portion of the budget defense and domestic discretionary, 390 00:19:36,280 --> 00:19:39,000 Speaker 1: nothing on revenue, nothing on entitlements, and it may only 391 00:19:39,000 --> 00:19:40,960 Speaker 1: be for one year, so it really doesn't meet the 392 00:19:41,000 --> 00:19:43,600 Speaker 1: full picture of the budget. In terms of the priorities 393 00:19:43,600 --> 00:19:46,640 Speaker 1: we're hearing about this budget, the increase in defense will 394 00:19:46,640 --> 00:19:49,679 Speaker 1: be paid for for cuts and domestic discretionary. What I 395 00:19:49,680 --> 00:19:52,160 Speaker 1: applaud them for is that they're paying for it. If 396 00:19:52,160 --> 00:19:54,080 Speaker 1: you want to do more of something, how are you 397 00:19:54,119 --> 00:19:56,600 Speaker 1: going to pay for it? That's very important. Now many 398 00:19:56,600 --> 00:19:58,560 Speaker 1: people disagree with the priorities, and I think they are 399 00:19:58,640 --> 00:20:01,320 Speaker 1: legitimate disagreements on both side. I leave it to the 400 00:20:01,359 --> 00:20:03,760 Speaker 1: security experts whether we need more or less in defense, 401 00:20:04,280 --> 00:20:06,440 Speaker 1: but I do think they will bump into some real 402 00:20:06,480 --> 00:20:09,600 Speaker 1: problems even from their own party on the Appropriators when 403 00:20:09,600 --> 00:20:13,119 Speaker 1: they're making this big cuts and domestic discretionary and if 404 00:20:13,160 --> 00:20:15,200 Speaker 1: they make them, the key will be will they stick. 405 00:20:15,280 --> 00:20:18,080 Speaker 1: Will Appropriators and Congress actually go along with it in 406 00:20:18,119 --> 00:20:20,840 Speaker 1: a in a sustained way. I have a chart I'm 407 00:20:20,840 --> 00:20:22,600 Speaker 1: working on that I'm going to put out here in 408 00:20:22,600 --> 00:20:26,080 Speaker 1: a moment and I'll refine it for tomorrow and ms McGinnis. 409 00:20:26,119 --> 00:20:28,840 Speaker 1: It's a basic chart that says the Republicans spend more. 410 00:20:28,880 --> 00:20:33,600 Speaker 1: It goes back to seventies something and it shows Reagan advent, 411 00:20:33,760 --> 00:20:38,639 Speaker 1: Bush Senior advent, Bush Junior advent and Trump advent And 412 00:20:38,680 --> 00:20:42,360 Speaker 1: do you just presume the Republican presidents end up spending 413 00:20:42,400 --> 00:20:46,800 Speaker 1: work and adding to our debt. That's a great question. 414 00:20:46,840 --> 00:20:49,840 Speaker 1: I would like to see your chart. It seems plausible 415 00:20:50,280 --> 00:20:53,160 Speaker 1: in recent years. Basically, there's so many things that are 416 00:20:53,160 --> 00:20:56,520 Speaker 1: going on, but that the myth that Republicans want to 417 00:20:56,560 --> 00:20:58,840 Speaker 1: cut spending and by the way, that Democrats want to 418 00:20:58,880 --> 00:21:02,400 Speaker 1: raise taxes doesn't usually end up playing out, particularly when 419 00:21:02,400 --> 00:21:05,720 Speaker 1: there's one party government. So the real cuts and spending 420 00:21:06,000 --> 00:21:08,800 Speaker 1: would be in entitlements, and so far, it doesn't seem 421 00:21:08,800 --> 00:21:10,440 Speaker 1: like we're in tracked to see any of that. So 422 00:21:10,520 --> 00:21:15,240 Speaker 1: spending is going to grow under this Republican House, Senate, 423 00:21:15,240 --> 00:21:18,280 Speaker 1: and White House unless some dramatic things happen, even if 424 00:21:18,320 --> 00:21:20,399 Speaker 1: they go forward and do what they're talking about, cutting 425 00:21:20,440 --> 00:21:23,760 Speaker 1: a lot out of domestic discretionary because unless you do 426 00:21:23,880 --> 00:21:27,440 Speaker 1: something to control healthcare costs and deal with our retirement challenges, 427 00:21:27,800 --> 00:21:31,359 Speaker 1: spending is on track to grow significantly and in fact dramatically. 428 00:21:31,440 --> 00:21:34,520 Speaker 1: So we are on track that both spending and taxes 429 00:21:34,560 --> 00:21:38,080 Speaker 1: will be well above their historical averages. That's like that 430 00:21:38,119 --> 00:21:41,520 Speaker 1: trend is likely to stay in place. UM. So what 431 00:21:41,600 --> 00:21:44,160 Speaker 1: I have seen is a lot of talk about spending 432 00:21:44,760 --> 00:21:47,119 Speaker 1: ends up being symbolic. It ends up being about the 433 00:21:47,119 --> 00:21:50,560 Speaker 1: small things like earmarks, because people are really unwilling to 434 00:21:50,640 --> 00:21:54,080 Speaker 1: tackle the biggest areas of spending, healthcare and retirement the 435 00:21:54,080 --> 00:21:56,000 Speaker 1: limited time we have left. Let me return something that 436 00:21:56,040 --> 00:21:57,479 Speaker 1: you said at the top. You said you're looking at 437 00:21:57,640 --> 00:22:00,760 Speaker 1: the people within the administration driving this. Mick mulvanny is 438 00:22:00,800 --> 00:22:02,920 Speaker 1: the head of the Office of Management and Budget. How 439 00:22:02,920 --> 00:22:06,920 Speaker 1: does he work with compliment um Gary Cohen saying, in 440 00:22:07,000 --> 00:22:10,640 Speaker 1: other words, is mckmulveny markedly radically different than other people 441 00:22:10,640 --> 00:22:12,800 Speaker 1: in this administration? We're driving economic policy, and how does 442 00:22:12,840 --> 00:22:16,200 Speaker 1: the administration then get those guys to work together. So 443 00:22:16,280 --> 00:22:18,560 Speaker 1: that's that's a good question. Mick mulvaney is certainly somebody 444 00:22:18,600 --> 00:22:21,040 Speaker 1: who I've been listening to very closely, because starting in 445 00:22:21,119 --> 00:22:24,600 Speaker 1: his testimony, he actually was the person who most emphasized 446 00:22:24,640 --> 00:22:28,199 Speaker 1: one the fiscal challenges the country faces and to a 447 00:22:28,320 --> 00:22:31,040 Speaker 1: really a realistic take on it, because we've been hearing 448 00:22:31,040 --> 00:22:34,040 Speaker 1: a lot of promises about both tackling the debt and 449 00:22:34,160 --> 00:22:36,000 Speaker 1: a lot of policies that would make the debt worse. 450 00:22:36,280 --> 00:22:38,439 Speaker 1: So that's why I thought Gary Cohen's comments were very 451 00:22:38,480 --> 00:22:41,520 Speaker 1: important on tax reform, but mixed. McK mulvaney has gone 452 00:22:41,560 --> 00:22:44,480 Speaker 1: farther and reminded the administration he's going to be the 453 00:22:44,520 --> 00:22:47,680 Speaker 1: person who says no, a tough but really important job 454 00:22:47,720 --> 00:22:50,399 Speaker 1: because everybody wants to give political giveaways, and he's going 455 00:22:50,440 --> 00:22:53,320 Speaker 1: to remind them entitlement reform is the center of this 456 00:22:53,440 --> 00:22:55,520 Speaker 1: and they cannot run away from it if they're serious 457 00:22:55,560 --> 00:22:57,840 Speaker 1: about dealing with the debt. I'm so glad you brought 458 00:22:57,960 --> 00:23:01,520 Speaker 1: up giveaways. How many giveaways Northwestern going to do against 459 00:23:01,600 --> 00:23:05,240 Speaker 1: Vanderbilt coming up here? My helping here, this is all 460 00:23:05,280 --> 00:23:09,440 Speaker 1: brand new for the Purple, isn't it. Yeah? Yeah, as 461 00:23:09,440 --> 00:23:12,960 Speaker 1: a Northwestern alum, this is a whole new experience for us. Okay, well, 462 00:23:13,440 --> 00:23:15,119 Speaker 1: the good news for you is Mr Gurr has been 463 00:23:15,160 --> 00:23:21,560 Speaker 1: through this like eight thousand consecutive times being from the North. Well, 464 00:23:21,960 --> 00:23:24,040 Speaker 1: we'll get you, we'll get you involved. I have Northwestern 465 00:23:24,080 --> 00:23:28,200 Speaker 1: beating Vanderbilt. I only did that for our esteem. Guest, 466 00:23:29,000 --> 00:23:32,400 Speaker 1: thank you so much for great perspective, David gurin Washington. 467 00:23:32,720 --> 00:23:45,879 Speaker 1: I'm Tom Keenan, New York. This is Bloomberg, brought you 468 00:23:45,960 --> 00:23:49,600 Speaker 1: by Bank of America, Mary Lynch, dedicated to bringing our 469 00:23:49,640 --> 00:23:53,240 Speaker 1: clients insights and solutions to meet the challenges of a 470 00:23:53,280 --> 00:23:58,159 Speaker 1: transforming world. That's the power of global connections. Mary Lynch, Pierce, 471 00:23:58,240 --> 00:24:02,119 Speaker 1: Feeder and Smith in Corporate Rated member s I p C. 472 00:24:05,000 --> 00:24:07,200 Speaker 1: Bringing our wonderful guests. I mean, it's it's just such 473 00:24:07,240 --> 00:24:10,800 Speaker 1: a pleasure to talk to smart people. David that actually 474 00:24:10,880 --> 00:24:15,280 Speaker 1: wants darkened the door of the evil CBO exactly. Douglas, 475 00:24:15,320 --> 00:24:18,600 Speaker 1: while taken online, former chief Economists of the President's Council 476 00:24:18,600 --> 00:24:21,760 Speaker 1: of Economic Advisors from a director of the Congressional Budget Office. 477 00:24:21,800 --> 00:24:23,639 Speaker 1: Great to have you here as we await this score 478 00:24:24,040 --> 00:24:27,520 Speaker 1: from the CBO on the American Healthcare Act and help 479 00:24:27,600 --> 00:24:29,640 Speaker 1: us out. First all, we talk about the CBO score 480 00:24:29,680 --> 00:24:31,000 Speaker 1: and I think we don't know what we're talking about. 481 00:24:31,000 --> 00:24:32,919 Speaker 1: I can admit we don't know what we're talking about. 482 00:24:33,480 --> 00:24:35,159 Speaker 1: What is it? What is the CBO score? What are 483 00:24:35,160 --> 00:24:39,040 Speaker 1: we gonna get from the CBO. The Senior CBO's primary 484 00:24:39,080 --> 00:24:42,320 Speaker 1: job is to estimate the impact on the federal budget 485 00:24:42,440 --> 00:24:45,280 Speaker 1: of any legislation that the Congress is considering. So what 486 00:24:45,400 --> 00:24:47,760 Speaker 1: you'll get from the CBO is, if you pass the 487 00:24:47,800 --> 00:24:51,200 Speaker 1: American Healthcare Act, what happens to revenue flows into the treasury? 488 00:24:51,280 --> 00:24:53,600 Speaker 1: What happens to spending flows out of the treasury year 489 00:24:53,600 --> 00:24:56,480 Speaker 1: by year for the next ten years. Uh. The main 490 00:24:57,080 --> 00:24:59,200 Speaker 1: purpose of that scores to make sure that the bill 491 00:24:59,359 --> 00:25:03,640 Speaker 1: satisfy I've the requirements of the quote Reconciliation Instruction, which 492 00:25:03,680 --> 00:25:05,760 Speaker 1: is that it saves two billion dollars over the next 493 00:25:05,760 --> 00:25:08,679 Speaker 1: ten years. That won't be the focus of the attention. 494 00:25:08,800 --> 00:25:12,000 Speaker 1: That's actually what the score is. It's the supplementary information 495 00:25:12,040 --> 00:25:14,879 Speaker 1: on coverage and premiums that CBO made release along with it. 496 00:25:14,920 --> 00:25:16,760 Speaker 1: Because I think most people are gonna look at I 497 00:25:16,840 --> 00:25:18,200 Speaker 1: want to go back to something that Tom said a 498 00:25:18,240 --> 00:25:20,119 Speaker 1: moment ago. He said, he was surprised by how quickly 499 00:25:20,160 --> 00:25:22,680 Speaker 1: this is happening. The CBO does amazingly detailed work on 500 00:25:22,720 --> 00:25:25,520 Speaker 1: a very quick a timetable. We only got this legislation 501 00:25:25,560 --> 00:25:27,239 Speaker 1: a couple of weeks back, and as you say, we're 502 00:25:27,240 --> 00:25:31,040 Speaker 1: gonna get some great detail as soon as today. Um 503 00:25:31,400 --> 00:25:33,959 Speaker 1: CBO has been working with the staff on energy, commerce 504 00:25:33,960 --> 00:25:36,959 Speaker 1: and ways and means in this case for quite sometimes, uh, 505 00:25:37,000 --> 00:25:39,840 Speaker 1: the staff will typically produce some rough sketch of what 506 00:25:39,880 --> 00:25:42,320 Speaker 1: they'd like to do. CBO say, okay, look sort of 507 00:25:42,320 --> 00:25:44,720 Speaker 1: like this, We need some details here or there. So 508 00:25:44,760 --> 00:25:48,679 Speaker 1: they've probably had, without exaggeration, ten fifteen iterations leading up 509 00:25:48,680 --> 00:25:51,760 Speaker 1: to this, which is the actually first official score. Help 510 00:25:51,840 --> 00:25:57,760 Speaker 1: us here, Dr Holdzeken with the nefarious Ford House office building. 511 00:25:58,400 --> 00:26:01,359 Speaker 1: It is this concrete fortress. It looks like you know, 512 00:26:02,119 --> 00:26:06,480 Speaker 1: nether East German, Germany, and it's not connected to the capitol. 513 00:26:06,600 --> 00:26:08,959 Speaker 1: You are in a discreet difference. What do they do 514 00:26:09,040 --> 00:26:12,520 Speaker 1: on the fourth floor at the Florida Office Building? What 515 00:26:12,680 --> 00:26:17,000 Speaker 1: is in the kool aid at the dreaded CBO. So 516 00:26:17,119 --> 00:26:19,240 Speaker 1: you should know that the Ford Building is a former 517 00:26:19,359 --> 00:26:24,119 Speaker 1: FBI fingerprints what we knew this. It has all the 518 00:26:24,200 --> 00:26:29,400 Speaker 1: ambience one would expect. How that, um, and uh, what's 519 00:26:29,560 --> 00:26:31,439 Speaker 1: in the kool aid? There is simply a desire to 520 00:26:32,200 --> 00:26:35,639 Speaker 1: understand the research literature that's necessary to score bill in 521 00:26:35,680 --> 00:26:38,359 Speaker 1: this case, how insurance markets work, what do we know 522 00:26:38,400 --> 00:26:42,359 Speaker 1: about the providers who are going to work onto those contracts, 523 00:26:42,440 --> 00:26:46,640 Speaker 1: and to you know, antistate Congress's needs. So it's really 524 00:26:46,640 --> 00:26:50,800 Speaker 1: a very academic research or in an institution that is, 525 00:26:50,920 --> 00:26:53,560 Speaker 1: you know, physically somewhat separate from the capital. You know, 526 00:26:53,640 --> 00:26:55,119 Speaker 1: I want to get from you a sense of how 527 00:26:55,160 --> 00:26:58,960 Speaker 1: unorthodox all that we've seen is we've seen this legislation 528 00:26:59,000 --> 00:27:01,360 Speaker 1: pushed through committee with out the CBO score. We've heard 529 00:27:01,359 --> 00:27:05,760 Speaker 1: a lot of rhetoric about the CBO's impartiality, questioning that impartiality. 530 00:27:06,200 --> 00:27:08,440 Speaker 1: How different is this that we're seeing and how worried 531 00:27:08,440 --> 00:27:11,600 Speaker 1: about it are you? But I think this is business 532 00:27:11,640 --> 00:27:13,320 Speaker 1: as usual to be honest, I'm not a bit worried 533 00:27:13,320 --> 00:27:16,240 Speaker 1: about it. Um. If you work at CBO, as I did, 534 00:27:16,280 --> 00:27:19,440 Speaker 1: you get criticized all the time from many different quarters. Um, 535 00:27:19,880 --> 00:27:21,960 Speaker 1: you know you're simply not going to be able to 536 00:27:22,000 --> 00:27:25,080 Speaker 1: please everybody all the time, and you shouldn't and so 537 00:27:25,040 --> 00:27:28,600 Speaker 1: these these issues arise as a matter of course. Um, 538 00:27:28,880 --> 00:27:31,600 Speaker 1: it's also true that often bills go through the markup, 539 00:27:31,640 --> 00:27:34,520 Speaker 1: they went through without a CBO score. The only bill 540 00:27:34,560 --> 00:27:36,399 Speaker 1: that really matters is the bill that comes out of 541 00:27:36,400 --> 00:27:39,800 Speaker 1: the Budget Committee. That's the first complete bill, the one 542 00:27:39,800 --> 00:27:41,639 Speaker 1: that will go to the floor of the House for 543 00:27:41,720 --> 00:27:43,439 Speaker 1: a vote. That's when you need to know what the 544 00:27:43,480 --> 00:27:45,920 Speaker 1: CBO score is. So, from a business point of either, 545 00:27:45,960 --> 00:27:48,320 Speaker 1: right on track. You were the head of the CBO 546 00:27:48,440 --> 00:27:51,399 Speaker 1: when those tax cuts in two thousand three were passed 547 00:27:51,400 --> 00:27:54,040 Speaker 1: by the Congress. Here we are looking at tax reform, 548 00:27:54,080 --> 00:27:57,119 Speaker 1: and I wonder what this approach to healthcare tells you 549 00:27:57,160 --> 00:27:59,639 Speaker 1: about what this Congress's approach to to tax reform is 550 00:27:59,640 --> 00:28:03,359 Speaker 1: going to be. I think we've seen the use of 551 00:28:03,400 --> 00:28:08,040 Speaker 1: reconciliation that that guarantees Democrats aren't going to play. It's 552 00:28:08,040 --> 00:28:11,159 Speaker 1: gonna be done entirely with Republican votes. Uh. This is 553 00:28:11,280 --> 00:28:14,320 Speaker 1: way harder than taxt re form. Healthcare is simply much 554 00:28:14,359 --> 00:28:17,080 Speaker 1: more divisive, both within the parties and across the parties. 555 00:28:17,560 --> 00:28:19,840 Speaker 1: And I expect this build to pass the House and 556 00:28:19,880 --> 00:28:21,880 Speaker 1: the pass Senate, but it's going to be a long, 557 00:28:21,960 --> 00:28:24,280 Speaker 1: hard process. Tax the form will look a lot easier 558 00:28:24,280 --> 00:28:28,600 Speaker 1: by comparison. Hey, look at um the plugins here in 559 00:28:28,720 --> 00:28:32,520 Speaker 1: the upshot today. Kevin Quayley with a terrific upshot today 560 00:28:32,560 --> 00:28:36,399 Speaker 1: of how broad the estimates are. The gues estimates of 561 00:28:36,480 --> 00:28:39,640 Speaker 1: Trump Care goop Care holds he can care whatever you 562 00:28:39,680 --> 00:28:42,160 Speaker 1: want to, whatever you want to call it. I mean, 563 00:28:42,280 --> 00:28:45,400 Speaker 1: how many plug ins are involved here? Can we actually 564 00:28:45,400 --> 00:28:49,520 Speaker 1: get a decent guestimate? I'll give you a flavor of 565 00:28:49,600 --> 00:28:51,880 Speaker 1: just how hard this is. An important part of the 566 00:28:51,920 --> 00:28:55,440 Speaker 1: bill is fifteen billion in two thousand eight ten dollion 567 00:28:55,440 --> 00:28:58,960 Speaker 1: every year thereafter two the states for a fund that 568 00:28:59,040 --> 00:29:03,040 Speaker 1: can be used to stay lies insurance markets in any state. 569 00:29:03,600 --> 00:29:06,280 Speaker 1: What will the states do with that money? Will they 570 00:29:06,320 --> 00:29:09,360 Speaker 1: accept the federal default reinsurance program or will they create 571 00:29:09,400 --> 00:29:12,760 Speaker 1: their own? Will they give folks additional money for cash 572 00:29:12,760 --> 00:29:16,760 Speaker 1: to cover out of pocket expenses? How CBO expects that 573 00:29:16,800 --> 00:29:19,120 Speaker 1: money to be spent has an enormous impact on the 574 00:29:19,120 --> 00:29:21,239 Speaker 1: premiums that will prevail in those markets. So that has 575 00:29:21,240 --> 00:29:23,520 Speaker 1: the enormous impacts on the coverage numbers that they expect. 576 00:29:24,040 --> 00:29:26,880 Speaker 1: And it's literally unknowable. I mean they've called the states, 577 00:29:26,960 --> 00:29:29,480 Speaker 1: they've talked to the governor's associations. They've done what they can, 578 00:29:29,800 --> 00:29:32,800 Speaker 1: but that's a really hard thing to estimate. Doug. Last 579 00:29:32,840 --> 00:29:35,200 Speaker 1: question here, I'm in Washington, the first time I've been 580 00:29:35,240 --> 00:29:37,800 Speaker 1: back since that President Trump was was inaugurated. I wonder 581 00:29:37,880 --> 00:29:39,280 Speaker 1: I want to get your sense of how much this 582 00:29:39,320 --> 00:29:42,120 Speaker 1: place has changed. We're facing a dead ceiling deadline, a 583 00:29:42,120 --> 00:29:46,320 Speaker 1: continuing resolution set to expire. The same old obstacles seem 584 00:29:46,360 --> 00:29:49,400 Speaker 1: to be here in Washington. Has the process changed at 585 00:29:49,440 --> 00:29:53,200 Speaker 1: all over the last three or four months. I think 586 00:29:53,360 --> 00:29:56,240 Speaker 1: this is the big test of whether the process has changed. 587 00:29:56,640 --> 00:29:59,840 Speaker 1: Can the Republicans who now control the House to sending 588 00:29:59,880 --> 00:30:03,520 Speaker 1: an the White House collectively governed effectively, Can they pass 589 00:30:03,680 --> 00:30:06,600 Speaker 1: legislation with the help of a president who's gonna, you know, 590 00:30:06,640 --> 00:30:09,400 Speaker 1: twist arms when he needs to and get things done, 591 00:30:09,880 --> 00:30:12,440 Speaker 1: or will we end up with more stalemates. I know 592 00:30:12,600 --> 00:30:14,880 Speaker 1: this is a very important moment for for the Republicans 593 00:30:14,920 --> 00:30:17,840 Speaker 1: who are going to run into thousand eighteen on their compliments, 594 00:30:17,840 --> 00:30:20,200 Speaker 1: on their accomplishments as a governing party. Well, this is 595 00:30:20,240 --> 00:30:22,400 Speaker 1: the first half, Doctor holds. He can thank you so much, 596 00:30:22,440 --> 00:30:26,040 Speaker 1: greatly appreciate. He's a former director of the Congressional Budget 597 00:30:26,120 --> 00:30:41,320 Speaker 1: office David Gura in Washington today in our Bloomberg ninety 598 00:30:41,360 --> 00:30:43,400 Speaker 1: nine one Studios Tom Keene in New York. It's pledg 599 00:30:43,400 --> 00:30:45,440 Speaker 1: would be joined by Greg Valley, a chief Global strategy 600 00:30:45,480 --> 00:30:48,640 Speaker 1: Horizon Investments. Here he sounds the clarion this morning. In 601 00:30:48,760 --> 00:30:52,280 Speaker 1: his note, he says to enormously controversial issues Obamacare replacement 602 00:30:52,440 --> 00:30:55,520 Speaker 1: and a radical new budget promise to throw Washington into gridlock, 603 00:30:55,600 --> 00:30:58,600 Speaker 1: further jeopardizing chances for tax reform this year. So we're 604 00:30:58,600 --> 00:31:01,320 Speaker 1: looking at legislative grid suck in the snow related gridlock 605 00:31:01,560 --> 00:31:04,240 Speaker 1: at tomorrow, Greg, Great to have you here. How bad 606 00:31:04,280 --> 00:31:06,040 Speaker 1: is it going to be? Do you think? How's this 607 00:31:06,040 --> 00:31:08,320 Speaker 1: ship and sunny? I talk to people about this healthcare bill, 608 00:31:08,760 --> 00:31:12,280 Speaker 1: and and I have difficulty finding those who very fulsibly supported. 609 00:31:12,400 --> 00:31:14,960 Speaker 1: It has its backwards in how Speaker Paul Ryan. But 610 00:31:14,960 --> 00:31:17,040 Speaker 1: where's the rest of the support going to come from? Yeah? 611 00:31:17,080 --> 00:31:19,080 Speaker 1: Like Trump said, who knew it was going to be 612 00:31:19,120 --> 00:31:21,840 Speaker 1: this complicated? Right? Good to see you, A good morning. 613 00:31:22,560 --> 00:31:24,400 Speaker 1: I think this is going to take a long long 614 00:31:24,480 --> 00:31:27,240 Speaker 1: time to iron out. I don't rule out the House 615 00:31:27,280 --> 00:31:30,880 Speaker 1: and Paul Ryan getting a deal by mid April, but 616 00:31:31,040 --> 00:31:33,080 Speaker 1: the Senate would never go along with this. You know, 617 00:31:33,120 --> 00:31:34,840 Speaker 1: maybe the goal is just to get a bill to 618 00:31:34,920 --> 00:31:37,840 Speaker 1: conference and two different bills and you could iron out 619 00:31:37,840 --> 00:31:40,680 Speaker 1: a deal then, but we're talking summer before we get 620 00:31:40,720 --> 00:31:44,360 Speaker 1: an Obamacare replacement. If then, So, the point I've been 621 00:31:44,400 --> 00:31:47,080 Speaker 1: making lately is that when you combine this with all 622 00:31:47,080 --> 00:31:50,440 Speaker 1: the fights about to come on the budget, we're talking 623 00:31:50,440 --> 00:31:53,120 Speaker 1: about a tax reform bill that probably won't make it 624 00:31:53,200 --> 00:31:55,920 Speaker 1: this year with this Obamacare replacement. Help me with the 625 00:31:55,960 --> 00:31:58,280 Speaker 1: realism here. We're waiting for this score from the CBO. 626 00:31:58,360 --> 00:32:00,920 Speaker 1: There's been a lot of political pushback because they went 627 00:32:00,960 --> 00:32:04,840 Speaker 1: to committee without getting that at that score. Is the 628 00:32:04,960 --> 00:32:07,560 Speaker 1: rush to get this through misguided? Uh? You know they're 629 00:32:07,560 --> 00:32:09,400 Speaker 1: they're still saying they could get something by April. You're 630 00:32:09,400 --> 00:32:11,680 Speaker 1: saying it could be well into the into the summer. 631 00:32:11,720 --> 00:32:13,640 Speaker 1: Why not why not just go get that CBO score 632 00:32:13,640 --> 00:32:15,560 Speaker 1: before doing all of that? Well, how is this for 633 00:32:15,600 --> 00:32:18,360 Speaker 1: an irony day? Eight years ago we had the exact 634 00:32:18,440 --> 00:32:23,280 Speaker 1: same scenario with Barack Obama squandering his political capital. You know, 635 00:32:23,320 --> 00:32:26,400 Speaker 1: we hope and change all this stuff, and we had 636 00:32:26,440 --> 00:32:30,680 Speaker 1: a meltdown on health reforum. So here eight years later, 637 00:32:30,800 --> 00:32:33,400 Speaker 1: it's as if no one has learned a lesson the 638 00:32:33,480 --> 00:32:36,280 Speaker 1: scoring today or tomorrow is going to be bad or 639 00:32:36,320 --> 00:32:39,080 Speaker 1: could it be really bad? It's going to make the 640 00:32:39,160 --> 00:32:42,840 Speaker 1: case for Ryan's bill even tougher to make. How was 641 00:32:42,880 --> 00:32:45,600 Speaker 1: the scoring. We've gotten scories from Brookings, We've gotten scories 642 00:32:45,640 --> 00:32:48,120 Speaker 1: from SMP Global as well. Is this going to be 643 00:32:48,400 --> 00:32:50,520 Speaker 1: the same thing but with the impromoter of of this, 644 00:32:50,760 --> 00:32:52,720 Speaker 1: of this non part as an entity or is it 645 00:32:52,760 --> 00:32:54,400 Speaker 1: going to give us more detail than those scores have 646 00:32:54,480 --> 00:32:57,360 Speaker 1: given us? Probably more detail. And I think they're pretty kosher. 647 00:32:57,440 --> 00:33:02,120 Speaker 1: I think the the CBO, Yeah, they're they're they're pretty uh, 648 00:33:02,400 --> 00:33:05,680 Speaker 1: pretty reliable in my opinion that the big part of 649 00:33:05,680 --> 00:33:08,200 Speaker 1: the story that's going to blow up and already has 650 00:33:08,360 --> 00:33:11,680 Speaker 1: is Medicaid. You've got a lot of moderate Republicans like 651 00:33:11,800 --> 00:33:14,720 Speaker 1: Rob Portman of Ohio, who were saying, no way in 652 00:33:14,760 --> 00:33:16,760 Speaker 1: the world are we going to pass a bill than 653 00:33:16,880 --> 00:33:19,440 Speaker 1: guts Medicaid. You know, I'm a mere mortal Gregg and 654 00:33:19,560 --> 00:33:22,120 Speaker 1: like you that have a complete wire tap into every 655 00:33:22,160 --> 00:33:26,400 Speaker 1: permutation of this. I've read my obligatory fourteen articles and 656 00:33:26,480 --> 00:33:30,040 Speaker 1: I went right to what you just mentioned, which this 657 00:33:30,280 --> 00:33:36,000 Speaker 1: is about Medicaid and Senators. I am thunderstruck by the 658 00:33:36,080 --> 00:33:40,200 Speaker 1: focus on the President and the House in minimal discussion 659 00:33:40,360 --> 00:33:45,160 Speaker 1: of Senate realities. What are those Senate realities. Well, just 660 00:33:45,240 --> 00:33:47,160 Speaker 1: as you said, Tom, and good morning to you, I 661 00:33:47,200 --> 00:33:52,120 Speaker 1: think that the Medicaid cuts are a non starter. These 662 00:33:52,160 --> 00:33:55,560 Speaker 1: are not negotiable with people like Rob Portman, and I'd 663 00:33:55,560 --> 00:33:59,640 Speaker 1: say maybe as many as a dozen Republicans are saying 664 00:33:59,640 --> 00:34:02,400 Speaker 1: we will go along with this bill. So it's it's 665 00:34:02,440 --> 00:34:04,640 Speaker 1: in big trouble even if it makes it through the 666 00:34:04,680 --> 00:34:06,880 Speaker 1: House in the next few weeks. You know, let's let's 667 00:34:06,920 --> 00:34:09,520 Speaker 1: go through the math again. I believe there's a hundred 668 00:34:09,520 --> 00:34:13,120 Speaker 1: senators something in the vicinity of that they have exactly 669 00:34:13,160 --> 00:34:16,839 Speaker 1: two votes to play with. And like I'm planned parenthood, 670 00:34:16,840 --> 00:34:20,200 Speaker 1: it's X number of senators on Medicate, it's y number 671 00:34:20,239 --> 00:34:23,560 Speaker 1: of senators. Forget about Ran Paul. But on each of 672 00:34:23,600 --> 00:34:27,239 Speaker 1: these issues, there's a certain number of Senators who just 673 00:34:27,320 --> 00:34:31,560 Speaker 1: will say no. Right Well, unless they can be persuaded 674 00:34:31,600 --> 00:34:35,120 Speaker 1: by the great dealmaker, Donald Trump, who feels that he 675 00:34:35,160 --> 00:34:38,799 Speaker 1: can inject himself into this and somehow get a compromise. 676 00:34:38,880 --> 00:34:41,520 Speaker 1: It's not out of the question that you could get 677 00:34:41,600 --> 00:34:45,400 Speaker 1: some softening on the Medicaid stuff that could satisfy people 678 00:34:45,440 --> 00:34:48,040 Speaker 1: like Rob Portman. But right now, if there were a 679 00:34:48,120 --> 00:34:50,000 Speaker 1: vote today, it would lose in the Senate by at 680 00:34:50,040 --> 00:34:52,400 Speaker 1: least a dozen votes. We were talking with that Douglas 681 00:34:52,440 --> 00:34:54,759 Speaker 1: will Taken, formerly of the CBO a little while ago, 682 00:34:55,520 --> 00:34:58,319 Speaker 1: and he said that a repeal or replacement of the 683 00:34:58,320 --> 00:35:00,440 Speaker 1: Affordable Care Act is gonna be way harder than than 684 00:35:00,520 --> 00:35:03,480 Speaker 1: tax reform you mentioned eight years ago. I remember all 685 00:35:03,480 --> 00:35:05,520 Speaker 1: the political capital that was spent by the Democrats to 686 00:35:05,560 --> 00:35:08,200 Speaker 1: get that legislation through. Now you see Republicans kind of 687 00:35:08,200 --> 00:35:09,919 Speaker 1: repeating that, putting a lot of chips on the table 688 00:35:09,960 --> 00:35:13,799 Speaker 1: here to get a repeal or replacement done. Was that 689 00:35:13,840 --> 00:35:15,799 Speaker 1: a mistake? Should they have gone with tax reform first? 690 00:35:15,800 --> 00:35:18,120 Speaker 1: What's the calculus here that they used to come up 691 00:35:18,160 --> 00:35:20,160 Speaker 1: with the order of operations here in Washington. Well, let's 692 00:35:20,200 --> 00:35:22,319 Speaker 1: go back just for a second day eight years ago. 693 00:35:22,400 --> 00:35:26,160 Speaker 1: Even Chuck Schumer has said the Obama white House miscalculated 694 00:35:26,200 --> 00:35:29,000 Speaker 1: by going to healthcare first. And again I think we're 695 00:35:29,040 --> 00:35:31,800 Speaker 1: seeing a repeat now. I would go for the tax 696 00:35:31,800 --> 00:35:35,080 Speaker 1: cuts that would be I think easier at this point, 697 00:35:35,320 --> 00:35:39,120 Speaker 1: but they won't. And even if we get Obamacare resolved, 698 00:35:39,400 --> 00:35:42,120 Speaker 1: the budget stories you guys will all report on for 699 00:35:42,160 --> 00:35:45,480 Speaker 1: the rest of this week are really dramatic, huge cuts, 700 00:35:45,560 --> 00:35:49,520 Speaker 1: draconian cuts, and once again, the problem won't be Democrats. 701 00:35:49,800 --> 00:35:52,920 Speaker 1: The problem will be Republicans who will say these cuts 702 00:35:52,960 --> 00:35:56,200 Speaker 1: are too harsh. You mentioned the budget, We get the 703 00:35:56,239 --> 00:35:59,880 Speaker 1: skinny budget. I love the term. Later this week, what 704 00:36:00,080 --> 00:36:01,520 Speaker 1: color is going to be in there that wasn't in 705 00:36:01,520 --> 00:36:03,799 Speaker 1: the overview a few weeks back. What more detail are 706 00:36:03,840 --> 00:36:05,799 Speaker 1: you expecting we'll get from the White House? Well, I 707 00:36:05,840 --> 00:36:09,000 Speaker 1: think the drop in federal employees. It was a big 708 00:36:09,040 --> 00:36:11,800 Speaker 1: story in the Washington Post this morning talking about the 709 00:36:11,960 --> 00:36:14,680 Speaker 1: huge cut in federal employees having an impact on the 710 00:36:14,800 --> 00:36:17,759 Speaker 1: DC area real estate. Things like that. I'm sure the 711 00:36:17,760 --> 00:36:21,880 Speaker 1: country won't be particularly sympathetic to Washington, d C. But 712 00:36:22,320 --> 00:36:24,319 Speaker 1: the other part of the story is the enormity of 713 00:36:24,320 --> 00:36:27,160 Speaker 1: the defense increases. I personally think that's going to happen, 714 00:36:27,480 --> 00:36:29,919 Speaker 1: and I tell all of my clients if there's one 715 00:36:30,080 --> 00:36:34,239 Speaker 1: pure investment play in Washington, it's the defense stunks. Do 716 00:36:34,360 --> 00:36:39,160 Speaker 1: you assume, Greg that our debt to GDP just rises 717 00:36:39,200 --> 00:36:42,840 Speaker 1: and rises? I mean, is the is the synthesis of 718 00:36:43,160 --> 00:36:46,120 Speaker 1: many of these what ifs. I understand there's huge variables, 719 00:36:46,160 --> 00:36:49,240 Speaker 1: but do you just assume it's like Reagan or Bush 720 00:36:49,280 --> 00:36:51,360 Speaker 1: one or Bush two, that up up we go in 721 00:36:51,400 --> 00:36:54,239 Speaker 1: debt to GDP. Well, the good news, Tom, is that 722 00:36:54,719 --> 00:36:57,640 Speaker 1: the bond market, I think can tolerate the current levels 723 00:36:57,640 --> 00:37:00,520 Speaker 1: where you know, on an annual basis, the deficit around 724 00:37:00,560 --> 00:37:04,200 Speaker 1: three percentage GDP. That's acceptable. But as we get towards 725 00:37:04,239 --> 00:37:07,080 Speaker 1: the end of this decade and then things as we 726 00:37:07,120 --> 00:37:09,919 Speaker 1: all get older than we spend more money, things could 727 00:37:09,920 --> 00:37:12,880 Speaker 1: get really sour in a hurry for the bond market. 728 00:37:13,080 --> 00:37:15,480 Speaker 1: So we've got a year or two of grace before 729 00:37:15,520 --> 00:37:18,799 Speaker 1: the deficit becomes a big, big problem. Where are the 730 00:37:18,840 --> 00:37:21,720 Speaker 1: deficit hawks? We talked with Mike McGinnis this morning. She's 731 00:37:21,800 --> 00:37:25,759 Speaker 1: she's a leader of that of that pack. Are they 732 00:37:25,800 --> 00:37:27,560 Speaker 1: present in watching right now? How big a part of 733 00:37:27,560 --> 00:37:31,600 Speaker 1: the conversation are they? Well, they're articulate and they can 734 00:37:31,640 --> 00:37:34,080 Speaker 1: make a lot of noise, but in terms of actually 735 00:37:34,080 --> 00:37:37,279 Speaker 1: getting something done. The counter argument is the Treasury ten 736 00:37:37,360 --> 00:37:39,560 Speaker 1: year bond yield. It's crept up a little, it's probably 737 00:37:40,040 --> 00:37:43,160 Speaker 1: uh two point five eight or something like that, but 738 00:37:43,200 --> 00:37:46,160 Speaker 1: that's still a very low yield for a bond. So 739 00:37:46,239 --> 00:37:48,879 Speaker 1: you'd have to see the bond market really freak out 740 00:37:49,040 --> 00:37:52,160 Speaker 1: and we haven't seen it yet, David, what's a skinny budget? 741 00:37:52,200 --> 00:37:55,080 Speaker 1: No one's ever presented. John Tucker if I've ever been 742 00:37:55,160 --> 00:37:59,480 Speaker 1: presented with a skinny budget, rather than get a trainer, 743 00:38:00,040 --> 00:38:04,640 Speaker 1: said I'd like to get my wife one. There you go. 744 00:38:05,600 --> 00:38:09,000 Speaker 1: What is the skinny budget, David? Skinny budget, I gather 745 00:38:09,080 --> 00:38:10,800 Speaker 1: is just a bit more detail than what in April. 746 00:38:10,800 --> 00:38:13,960 Speaker 1: Greg will get more detail stills. Yeah, And by the way, guys, 747 00:38:14,000 --> 00:38:17,239 Speaker 1: there's two other big budget stories. On Wednesday we hit 748 00:38:17,280 --> 00:38:19,919 Speaker 1: the death Sailing. It's gonna be months before they get 749 00:38:19,960 --> 00:38:23,160 Speaker 1: that resolved. And then on April the government runs out 750 00:38:23,160 --> 00:38:27,640 Speaker 1: of money. This continuing Resolution, which you know it's it's wonky, 751 00:38:27,800 --> 00:38:30,880 Speaker 1: but you've got big issues hanging over the White House. 752 00:38:31,520 --> 00:38:33,480 Speaker 1: Let's do this, Greg Villier, where this is a rise 753 00:38:33,520 --> 00:38:36,080 Speaker 1: that we're gonna come back because Greg Villier is focused 754 00:38:36,400 --> 00:38:42,680 Speaker 1: on gridlock. Republican Republican Republican gridlock. Greg Villier in Washington 755 00:38:42,760 --> 00:38:46,520 Speaker 1: with our David guru, and you know it's really timely, David. 756 00:38:46,600 --> 00:38:49,160 Speaker 1: You have Mr Villier with us because he's from New 757 00:38:49,160 --> 00:38:56,480 Speaker 1: Hampshire and he remembers the Great Snow of seventeen. Bloomberg 758 00:38:56,960 --> 00:39:00,720 Speaker 1: meteorologist Rob Caroline's descended Cotton mathered gave us a report 759 00:39:00,719 --> 00:39:06,000 Speaker 1: in it over six of snow, over five or six days, 760 00:39:06,480 --> 00:39:11,080 Speaker 1: Turkeys died, DearS died, dear diet I should say English 761 00:39:11,440 --> 00:39:17,200 Speaker 1: the great snow of seventeen seventeen. Len's perspective, David snowball 762 00:39:17,239 --> 00:39:18,880 Speaker 1: in the hands of an angry God, I think was 763 00:39:18,920 --> 00:39:21,319 Speaker 1: the sermon to thank you very much. Greg valuate with 764 00:39:21,360 --> 00:39:25,920 Speaker 1: me here in our Blueberg studios. Greg, help us understand 765 00:39:25,920 --> 00:39:28,080 Speaker 1: what we're seeing. We're seeing what's happening on Capitol Hill 766 00:39:28,440 --> 00:39:30,520 Speaker 1: with with healthcare. What does that tell us about how 767 00:39:30,520 --> 00:39:32,560 Speaker 1: the tax reform debate is going to play out? Well, 768 00:39:32,600 --> 00:39:34,560 Speaker 1: first of all, I'm going to be in New Hampshire 769 00:39:34,560 --> 00:39:37,279 Speaker 1: this evening, so it should be an interesting twenty four 770 00:39:37,320 --> 00:39:39,880 Speaker 1: hours of snow. Well, the debate on the Hill is 771 00:39:39,920 --> 00:39:42,960 Speaker 1: really important for the financial markets to this extent. If 772 00:39:43,000 --> 00:39:47,120 Speaker 1: they can't get this stuff done Obamacare budget, what does 773 00:39:47,160 --> 00:39:49,439 Speaker 1: that say for the good stuff? The good stuff being 774 00:39:49,760 --> 00:39:53,800 Speaker 1: tax reform, infrastructure. Most everyone had assumed a g d 775 00:39:53,960 --> 00:39:57,879 Speaker 1: P impact of all this stuff by winter of next year. 776 00:39:58,160 --> 00:40:00,400 Speaker 1: That g d P impact maybe delay aid by a 777 00:40:00,440 --> 00:40:03,400 Speaker 1: fair amount. You mentioned April before we went to to 778 00:40:03,560 --> 00:40:07,279 Speaker 1: break how big a forcing mechanism is that date. You'd 779 00:40:07,320 --> 00:40:09,560 Speaker 1: like to think that it would impose some discipline, but 780 00:40:09,640 --> 00:40:13,400 Speaker 1: it will not. Will April will come and go, just 781 00:40:13,480 --> 00:40:15,800 Speaker 1: like this Wednesday will come and go. In the death ceiling, 782 00:40:16,160 --> 00:40:20,160 Speaker 1: they'll do extensions. They'll extend the government for another two 783 00:40:20,239 --> 00:40:22,560 Speaker 1: or three months. The death ceiling probably won't be dealt 784 00:40:22,600 --> 00:40:26,960 Speaker 1: with with finality until midsummer. You've written about the sausage 785 00:40:26,960 --> 00:40:29,120 Speaker 1: making and how it's taking far longer than the President 786 00:40:29,200 --> 00:40:31,480 Speaker 1: and many investors thought it would. When you talk to 787 00:40:31,520 --> 00:40:33,279 Speaker 1: clients when you go on the road, what do they say, 788 00:40:33,280 --> 00:40:36,440 Speaker 1: What do they ask you about the timetable here in Washington? 789 00:40:36,480 --> 00:40:38,080 Speaker 1: And and you know, is it fair to say that 790 00:40:38,120 --> 00:40:40,560 Speaker 1: a lot of investors got this wrong, they were overly optimistic. Well, 791 00:40:40,560 --> 00:40:43,520 Speaker 1: two things investors say a lot. Number one is, let's 792 00:40:43,560 --> 00:40:46,160 Speaker 1: talk about the details on the tax bill. Do we 793 00:40:46,239 --> 00:40:49,839 Speaker 1: have this border adjustability? Do we have limits on deductions? 794 00:40:50,440 --> 00:40:53,720 Speaker 1: Lots of really big topics have still not been resolved 795 00:40:53,800 --> 00:40:56,920 Speaker 1: number one. Number two, I'm astonished by how many clients 796 00:40:56,960 --> 00:41:01,000 Speaker 1: I see conservatives who say, I wish this guy stop tweeting. 797 00:41:01,320 --> 00:41:04,880 Speaker 1: It's not adult. That doesn't sound presidential. You get that 798 00:41:04,920 --> 00:41:10,160 Speaker 1: from almost everybody to be fair to please just stop it, 799 00:41:10,320 --> 00:41:14,080 Speaker 1: you know, yep, exactly and up my children? Was dad? Greg? 800 00:41:14,200 --> 00:41:17,320 Speaker 1: Help me here? Within your note this morning, you mentioned 801 00:41:17,320 --> 00:41:21,919 Speaker 1: the word gridlock. Gridlock assumes that Tip O'Neill will ride 802 00:41:21,920 --> 00:41:24,799 Speaker 1: to the rescue when I have a cordial conversation with 803 00:41:24,880 --> 00:41:30,960 Speaker 1: the gipper. Uh, is there any tone of compromise between 804 00:41:31,280 --> 00:41:35,040 Speaker 1: good parties of the House, the Senate, in the White House. Well, 805 00:41:35,080 --> 00:41:37,719 Speaker 1: first and foremost time, there will be no help from 806 00:41:37,719 --> 00:41:41,879 Speaker 1: Democrats zero. Okay, I get that. And secondly, you had 807 00:41:41,880 --> 00:41:45,719 Speaker 1: have to assume that Trump will inject himself and may 808 00:41:45,719 --> 00:41:48,600 Speaker 1: be able to get some things done. But you almost 809 00:41:48,680 --> 00:41:52,600 Speaker 1: have an impossible task with the so called Freedom Caucus, 810 00:41:53,120 --> 00:41:55,359 Speaker 1: which will not want to raise the debt ceiling, has 811 00:41:55,400 --> 00:41:58,080 Speaker 1: their own idea on taxes, on healthcare. They will not 812 00:41:58,239 --> 00:42:01,280 Speaker 1: agree with Ryan I and I sort of feel sorry 813 00:42:01,280 --> 00:42:04,120 Speaker 1: for He's in the same bind that Bayner was in, 814 00:42:04,520 --> 00:42:07,239 Speaker 1: and that bind that Bayner was in eventually cost him 815 00:42:07,360 --> 00:42:10,120 Speaker 1: his job. What's the dumb question of the day, I'm 816 00:42:10,160 --> 00:42:13,360 Speaker 1: allowed to do that, David Snowstorm coming. What's the difference 817 00:42:13,360 --> 00:42:16,640 Speaker 1: between the Freedom Caucus and the Tea Party? Not much? 818 00:42:16,719 --> 00:42:20,560 Speaker 1: I'd say they're pretty much analogous. They both don't want 819 00:42:20,600 --> 00:42:23,240 Speaker 1: to spend money. They don't want to spend money on infrastructure. 820 00:42:23,560 --> 00:42:27,319 Speaker 1: They consider this health reform plan like Obamacare light. They're 821 00:42:27,440 --> 00:42:29,920 Speaker 1: very angry about it. And then you've got to go 822 00:42:29,960 --> 00:42:31,440 Speaker 1: on the other side of the hill and look at 823 00:42:31,440 --> 00:42:34,520 Speaker 1: all these moderate senators who roll their eyes and say, 824 00:42:34,520 --> 00:42:36,640 Speaker 1: we're not going to go along with the Freedom Caucus. 825 00:42:37,360 --> 00:42:41,440 Speaker 1: You float the idea of bifurcating tax reform, doing corporate 826 00:42:41,480 --> 00:42:45,719 Speaker 1: tax reform and personal tax reform separately. What's the advantage 827 00:42:45,719 --> 00:42:47,320 Speaker 1: to doing that? And if you look at sort of 828 00:42:47,360 --> 00:42:49,959 Speaker 1: how slowly things are progressing, does that stand to slow 829 00:42:50,000 --> 00:42:51,839 Speaker 1: things down even more if you've got two different things 830 00:42:51,840 --> 00:42:53,919 Speaker 1: that these lawmakers are working on. Well, I know it's 831 00:42:53,960 --> 00:42:57,759 Speaker 1: being debated intensely within the Trump administration, and I got 832 00:42:57,800 --> 00:43:00,279 Speaker 1: this from a very good source. Uh, they're a uses 833 00:43:00,280 --> 00:43:03,040 Speaker 1: and minuses. I think they want to show more signs 834 00:43:03,040 --> 00:43:06,120 Speaker 1: of momentum. They're not showing a lot of momentum right now, 835 00:43:06,160 --> 00:43:08,600 Speaker 1: and I think the markets need to see that things 836 00:43:08,600 --> 00:43:11,520 Speaker 1: are moving. So if you do cut it in half, 837 00:43:11,560 --> 00:43:15,000 Speaker 1: you probably could get the business stuff done by by fall. 838 00:43:15,280 --> 00:43:19,040 Speaker 1: Well said, but to your point on Grid Luck is 839 00:43:19,080 --> 00:43:22,319 Speaker 1: there any tone or demeanor or body language to quote 840 00:43:22,400 --> 00:43:25,120 Speaker 1: unquote cut in half? I would think, if anything, the 841 00:43:25,160 --> 00:43:28,520 Speaker 1: President would lead on that. I mean, he's the ultimate 842 00:43:28,560 --> 00:43:32,359 Speaker 1: cut in half guy. Well what about everybody else? Well, 843 00:43:32,440 --> 00:43:34,759 Speaker 1: let's see what minutation does. There are a couple of 844 00:43:34,760 --> 00:43:38,160 Speaker 1: other big, big players from government sacks who I think 845 00:43:38,160 --> 00:43:41,520 Speaker 1: can uh urge the president to do things that the 846 00:43:41,600 --> 00:43:44,839 Speaker 1: markets would like to see. But right now it's all 847 00:43:44,920 --> 00:43:47,160 Speaker 1: hands on deck on Obamacare. And to go back to 848 00:43:47,200 --> 00:43:49,759 Speaker 1: what we talked about at the very beginning, this is 849 00:43:49,800 --> 00:43:53,240 Speaker 1: eerily similar to eight years ago when a new president 850 00:43:53,360 --> 00:43:58,319 Speaker 1: squandered his political capital on healthcare. Let me ask you 851 00:43:58,360 --> 00:44:00,160 Speaker 1: travel a ton you're going up to do him? Sure, 852 00:44:00,200 --> 00:44:02,440 Speaker 1: as you say, what are you hearing from people about 853 00:44:02,480 --> 00:44:04,880 Speaker 1: the state of the economy? Clients? You're talking to people 854 00:44:04,880 --> 00:44:06,640 Speaker 1: that you meet when you're on the road. We got 855 00:44:06,680 --> 00:44:10,560 Speaker 1: the job's number last week, two thousand, A nice number. 856 00:44:10,600 --> 00:44:12,520 Speaker 1: What are people saying to you as you travel? The 857 00:44:12,600 --> 00:44:15,960 Speaker 1: one thing, guys that strikes me when I see business 858 00:44:16,040 --> 00:44:18,480 Speaker 1: leaders and I asked them, what's your biggest problem? Is 859 00:44:18,480 --> 00:44:23,360 Speaker 1: that Obamacare? No? Is it regulations? No, lack of skilled labor. 860 00:44:23,719 --> 00:44:27,000 Speaker 1: They say that over and over again. All around the country. 861 00:44:27,320 --> 00:44:29,759 Speaker 1: There's a fear that they were running out of skilled labor, 862 00:44:29,800 --> 00:44:32,120 Speaker 1: that the labor market is really tight. And what comes 863 00:44:32,160 --> 00:44:36,279 Speaker 1: next wage pressure and higher higher interest rates. If you 864 00:44:36,400 --> 00:44:38,719 Speaker 1: raise the wage, they come out of the woodwork. Right. 865 00:44:38,760 --> 00:44:41,160 Speaker 1: Is that where we're heading? Yes, And I think that's 866 00:44:41,160 --> 00:44:43,560 Speaker 1: why Yellen is going to move this week. I think 867 00:44:43,600 --> 00:44:46,720 Speaker 1: she has to worry Tom that she's way behind the curve. 868 00:44:47,600 --> 00:44:49,239 Speaker 1: Very quickly here, Great, before we let you go, We've 869 00:44:49,239 --> 00:44:51,120 Speaker 1: got this fifth meeting schedule for Tuesday as they help 870 00:44:51,160 --> 00:44:54,160 Speaker 1: us with the weather state of play here in Washington. 871 00:44:54,239 --> 00:44:56,120 Speaker 1: If if things get bad, if there's a government chet 872 00:44:56,160 --> 00:44:59,000 Speaker 1: to what happens to that meeting? Is it done telephonically? Yeah? 873 00:44:59,080 --> 00:45:02,920 Speaker 1: They They have had a a precedent of having meetings 874 00:45:02,920 --> 00:45:06,520 Speaker 1: by conference call it for an emergency high hiker cut, 875 00:45:06,600 --> 00:45:08,759 Speaker 1: so they can they can do that. The one thing 876 00:45:08,800 --> 00:45:11,200 Speaker 1: obviously we gotta watch is the statement. I think she'll 877 00:45:11,200 --> 00:45:13,279 Speaker 1: make it clear we've got a few more moose to 878 00:45:13,320 --> 00:45:16,399 Speaker 1: come this year. Greg RELLI great to speak with. Great 879 00:45:16,440 --> 00:45:18,759 Speaker 1: to see you here in d C. My pleasure Value, 880 00:45:18,840 --> 00:45:22,239 Speaker 1: chief Global strategis at Horizon Investments. In Tom, We're missing 881 00:45:22,280 --> 00:45:26,040 Speaker 1: you down here. I'm gonna be stuck here. I understand 882 00:45:26,320 --> 00:45:29,759 Speaker 1: that that like it's gonna snow like twenty inches, but 883 00:45:29,880 --> 00:45:34,720 Speaker 1: within four gates with Reagan of American Airlines, it snows 884 00:45:34,719 --> 00:45:37,719 Speaker 1: a hockey goal. I can't wait for they push all 885 00:45:37,719 --> 00:45:40,040 Speaker 1: the snow to the shuttle gates. That's right, they just 886 00:45:40,120 --> 00:45:43,200 Speaker 1: pile it up. Greg. I hope you find you know. 887 00:45:43,239 --> 00:45:45,960 Speaker 1: I hope it's not like the Blizzard of s I 888 00:45:46,040 --> 00:45:56,640 Speaker 1: vaguely recall at the RI as well. Thanks for listening 889 00:45:56,719 --> 00:46:01,440 Speaker 1: to the Bloomberg Surveillance podcast. Subscribe and listen to interviews 890 00:46:01,520 --> 00:46:06,879 Speaker 1: on iTunes, SoundCloud, or whichever podcast platform you prefer. I'm 891 00:46:06,880 --> 00:46:09,879 Speaker 1: out on Twitter at Tom Keene. David Gura is at 892 00:46:10,000 --> 00:46:14,359 Speaker 1: David Gura. Before the podcast, you can always catch us worldwide. 893 00:46:14,800 --> 00:46:30,680 Speaker 1: I'm Bloomberg Radio, brought you by Bank of America Mary Lynch, 894 00:46:30,800 --> 00:46:35,080 Speaker 1: dedicated to bringing our clients insights and solutions to meet 895 00:46:35,080 --> 00:46:38,560 Speaker 1: the challenges of a transforming world. That's the power of 896 00:46:38,600 --> 00:46:43,720 Speaker 1: global connections. Mary Lynch, Pierce, Fenner and Smith Incorporated, Member 897 00:46:44,320 --> 00:46:45,000 Speaker 1: s I p C.