1 00:00:09,720 --> 00:00:12,880 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene with 2 00:00:13,600 --> 00:00:16,520 Speaker 1: David Gura. Daily we bring you insight from the best 3 00:00:16,560 --> 00:00:22,239 Speaker 1: of economics, finance, investment, and international relations. Find Bloomberg Surveillance 4 00:00:22,320 --> 00:00:27,000 Speaker 1: on Apple Podcasts, SoundCloud, Bloomberg dot Com, and of course, 5 00:00:27,320 --> 00:00:35,000 Speaker 1: on the Bloomberg. Good Morning everyone, Tom mcken here in 6 00:00:35,040 --> 00:00:37,760 Speaker 1: New York we say good morning on economics, finance, investment, 7 00:00:37,760 --> 00:00:41,480 Speaker 1: on politics, international relations. Joining me this morning, Barry ridholds 8 00:00:41,720 --> 00:00:47,000 Speaker 1: out with his ton ten finance books worth reading this winter. 9 00:00:48,080 --> 00:00:52,040 Speaker 1: Good morning, Good morning, ten books that you have out? 10 00:00:52,600 --> 00:00:55,720 Speaker 1: Was it hard to put it together? Uh? The difficulty 11 00:00:55,840 --> 00:00:58,520 Speaker 1: is cutting it down from thousands. Not by the way 12 00:00:58,560 --> 00:01:01,360 Speaker 1: I do this. Everyone into in every summer we put 13 00:01:01,360 --> 00:01:04,920 Speaker 1: out a list of ten. What's different about this list 14 00:01:05,000 --> 00:01:08,000 Speaker 1: is instead of telling you, hey, these are ten books 15 00:01:08,000 --> 00:01:10,680 Speaker 1: that are just coming out, go back. Yeah. I looked 16 00:01:10,720 --> 00:01:13,000 Speaker 1: at it. I looked at my purchase book to read 17 00:01:13,080 --> 00:01:18,040 Speaker 1: book ratio, the Peter R ratio, which is actually somewhere 18 00:01:18,040 --> 00:01:21,080 Speaker 1: in the low twos. It's a very disappointing number. We 19 00:01:21,160 --> 00:01:24,120 Speaker 1: all have bookshelves at home filled with books that we 20 00:01:24,160 --> 00:01:27,720 Speaker 1: had every intention of reading. But but but let's be honest, 21 00:01:28,080 --> 00:01:30,200 Speaker 1: nobody read a Brief History of Time. It may be 22 00:01:30,319 --> 00:01:34,679 Speaker 1: the most sold book in history, completely unread in finance. 23 00:01:34,720 --> 00:01:36,920 Speaker 1: There are lots of books like that, So I picked ten, 24 00:01:37,760 --> 00:01:40,119 Speaker 1: and uh, I think they are fun collection. We'll talk 25 00:01:40,160 --> 00:01:42,640 Speaker 1: about that through the morning. Berry Ridolds with us writing 26 00:01:42,640 --> 00:01:45,000 Speaker 1: for Bloomberg View and Smart Stuff on tons of talk 27 00:01:45,040 --> 00:01:48,520 Speaker 1: about We'll talk to Mr Dholds solo here later in 28 00:01:49,240 --> 00:01:52,560 Speaker 1: the our Conrade Decados for this. This is the patient 29 00:01:52,720 --> 00:01:55,360 Speaker 1: Conrad de Quadros who had to put up with a 30 00:01:55,440 --> 00:01:59,639 Speaker 1: really interesting panel in Frankfurt, Germany. You were very patient 31 00:01:59,720 --> 00:02:03,160 Speaker 1: until levision is cherry yelling, elbowed you out of the way, 32 00:02:03,240 --> 00:02:06,160 Speaker 1: and then Governor Karney elbowed you out of the way. 33 00:02:06,280 --> 00:02:10,520 Speaker 1: And then Mr Drogh who has the biggest challenge in 34 00:02:10,600 --> 00:02:16,239 Speaker 1: two thousand and eighteen of let's presume Powell drag Karney Corona. 35 00:02:16,400 --> 00:02:19,560 Speaker 1: Who's got the toughest road ahead? Well, I would think 36 00:02:19,600 --> 00:02:22,480 Speaker 1: that the toughest road actually gonna pick two people. I 37 00:02:22,520 --> 00:02:25,040 Speaker 1: think that um Carneys is going to have a tough 38 00:02:25,120 --> 00:02:29,160 Speaker 1: road because um right now they have inflation that's above 39 00:02:29,480 --> 00:02:32,280 Speaker 1: their target at three percent. Uh. They have the expectation 40 00:02:32,320 --> 00:02:34,320 Speaker 1: that inflation will slow, but a lot of that is 41 00:02:34,520 --> 00:02:36,239 Speaker 1: seems to be kind of out of their hands. A 42 00:02:36,520 --> 00:02:39,440 Speaker 1: big part of their expectation for slowing inflation is the 43 00:02:39,480 --> 00:02:41,840 Speaker 1: improvement in the value of the pound um, but of 44 00:02:41,840 --> 00:02:46,799 Speaker 1: course that is being driven by political events in the UK. 45 00:02:47,600 --> 00:02:51,320 Speaker 1: It's been driven by Brexit and um with some of 46 00:02:51,600 --> 00:02:53,880 Speaker 1: the difficulties of Theresa May, we've seen the pound to 47 00:02:53,919 --> 00:02:56,680 Speaker 1: take a dip down, so you know, it's some of 48 00:02:56,680 --> 00:02:58,000 Speaker 1: the movements in the pound are kind of out of 49 00:02:58,040 --> 00:02:59,600 Speaker 1: his hands, and yet he needs that to get the 50 00:02:59,600 --> 00:03:03,480 Speaker 1: slow inflorenus um and then on on for for dragging. 51 00:03:03,600 --> 00:03:06,280 Speaker 1: His issue is that, you know, they have this expectation 52 00:03:06,320 --> 00:03:09,440 Speaker 1: of a small slowing and information and based on that 53 00:03:09,760 --> 00:03:12,640 Speaker 1: they have the expectation that they'll be buying another tutor 54 00:03:12,680 --> 00:03:15,600 Speaker 1: and seventy billion dollars of billion euros of bonds next 55 00:03:15,720 --> 00:03:19,280 Speaker 1: year UM. But you know that that inflation outlook is 56 00:03:19,280 --> 00:03:22,160 Speaker 1: obviously quite uncertain, so they could be challenged by it. 57 00:03:22,560 --> 00:03:27,000 Speaker 1: The great acclaim of Conrad de Quadras John writing framed 58 00:03:27,000 --> 00:03:29,520 Speaker 1: by you guys at bear Stearns, was the putting green. 59 00:03:30,080 --> 00:03:33,560 Speaker 1: Does Janet Yellen have any clue on the fairway where 60 00:03:33,560 --> 00:03:37,280 Speaker 1: the putting green is? To go back to your historic image. 61 00:03:37,560 --> 00:03:39,880 Speaker 1: You know that the putting green analogy we we came 62 00:03:39,960 --> 00:03:42,800 Speaker 1: up with back in the mid two thousand's when uh 63 00:03:42,840 --> 00:03:46,480 Speaker 1: that we first started with the discussions of gradualism and 64 00:03:46,760 --> 00:03:48,600 Speaker 1: why the fit thought that was a good idea and 65 00:03:48,920 --> 00:03:52,040 Speaker 1: we argued that that wasn't a good idea. Gradualism is 66 00:03:52,080 --> 00:03:54,160 Speaker 1: like when you take the putter out. But but we 67 00:03:54,160 --> 00:03:58,440 Speaker 1: were still standing, um, you know, back on the tea box. Um, 68 00:03:58,560 --> 00:04:01,600 Speaker 1: and and that's something that's kind of morphed into and 69 00:04:02,040 --> 00:04:05,320 Speaker 1: I think something even worse now we're um, I don't 70 00:04:05,360 --> 00:04:07,520 Speaker 1: even know if there's a golf analogy anymore for for 71 00:04:07,560 --> 00:04:10,400 Speaker 1: how slow that the FED has been going so um. 72 00:04:10,680 --> 00:04:13,119 Speaker 1: But you know, the fact is there there hasn't been, 73 00:04:13,160 --> 00:04:16,760 Speaker 1: as they've correctly pointed out, there hasn't been any bad 74 00:04:16,839 --> 00:04:20,400 Speaker 1: outcomes yet. But the problem is we don't know what's 75 00:04:20,400 --> 00:04:23,520 Speaker 1: going to happen going forward. So bery do you play golf? 76 00:04:23,560 --> 00:04:26,200 Speaker 1: I do not. I don't either. I have a busy 77 00:04:26,240 --> 00:04:30,159 Speaker 1: schedule that allows some indulgences. I would rather be on 78 00:04:30,160 --> 00:04:33,159 Speaker 1: a tennis court than I go. So that's you know, 79 00:04:33,200 --> 00:04:34,800 Speaker 1: you could work up a sweat, you really don't work 80 00:04:34,839 --> 00:04:37,720 Speaker 1: up a sweat other than carrying a bag with golf 81 00:04:37,960 --> 00:04:40,520 Speaker 1: and those carts are so underpowered they really need a 82 00:04:40,560 --> 00:04:43,839 Speaker 1: little more horsepower. So, UM, I have a question for 83 00:04:43,880 --> 00:04:48,200 Speaker 1: our guest about what's happening with the Federal Reserve we UM. 84 00:04:48,240 --> 00:04:50,120 Speaker 1: I keep seeing a lot of push back to the 85 00:04:50,200 --> 00:04:55,120 Speaker 1: gradual pace of normalizing rates in that the FED is 86 00:04:55,240 --> 00:04:58,560 Speaker 1: behind the curve and you could see this because the 87 00:04:58,640 --> 00:05:01,479 Speaker 1: yield curve is now flat and it's problematic and blah 88 00:05:01,480 --> 00:05:04,760 Speaker 1: blah blah. Do you buy into any of those the 89 00:05:04,760 --> 00:05:08,560 Speaker 1: FED is ruining us sort of arguments, you know on 90 00:05:08,600 --> 00:05:11,040 Speaker 1: the yield curve, which things a great question. It's obviously 91 00:05:11,040 --> 00:05:13,800 Speaker 1: seems something that people are very focused on right now. 92 00:05:14,240 --> 00:05:16,560 Speaker 1: We're not yet at levels on the on the yield 93 00:05:16,600 --> 00:05:18,240 Speaker 1: curve in terms of the flatness of the yel curve 94 00:05:18,240 --> 00:05:20,159 Speaker 1: where need to be worried about a downturn in the 95 00:05:20,200 --> 00:05:23,000 Speaker 1: in the economy. But at the same time, I think 96 00:05:23,040 --> 00:05:26,159 Speaker 1: it's an important indicators as I think it is. UM. 97 00:05:26,279 --> 00:05:28,760 Speaker 1: The other issue is that we have a yeel curve 98 00:05:28,800 --> 00:05:31,280 Speaker 1: that's being influenced both at the front end and at 99 00:05:31,279 --> 00:05:34,680 Speaker 1: the back end by by policies. UM, So what kind 100 00:05:34,720 --> 00:05:36,480 Speaker 1: of message is is it delivering? Like if we look 101 00:05:36,520 --> 00:05:38,880 Speaker 1: back at when we had the Treasury Fed a chord, 102 00:05:38,920 --> 00:05:41,159 Speaker 1: which is the last time in which there was an 103 00:05:41,200 --> 00:05:44,200 Speaker 1: explicit action on the part of the Central Bank to 104 00:05:44,320 --> 00:05:45,760 Speaker 1: target about the front end of the back end of 105 00:05:45,800 --> 00:05:49,400 Speaker 1: the yel curve. It wasn't particularly instructive back then either. 106 00:05:49,440 --> 00:05:51,279 Speaker 1: We went into recession when the yield curve was at 107 00:05:51,279 --> 00:05:53,640 Speaker 1: two d basis points. Um. So right now, you know, 108 00:05:53,680 --> 00:05:55,920 Speaker 1: if the FED wanted to steep in the yield curve, 109 00:05:55,960 --> 00:05:58,160 Speaker 1: they could do that quite easily. They could just communicate 110 00:05:58,279 --> 00:06:00,320 Speaker 1: that they're not going to do much on the front 111 00:06:00,400 --> 00:06:03,360 Speaker 1: end of the curve, but they're gonna accelerate the wind 112 00:06:03,440 --> 00:06:05,120 Speaker 1: under the balance sheet. Would step in the eel curve? 113 00:06:05,160 --> 00:06:07,600 Speaker 1: Would that be something that's necessarily good for the economy. 114 00:06:07,920 --> 00:06:10,760 Speaker 1: I'm not sure that we can make that case. So, um, 115 00:06:11,400 --> 00:06:13,440 Speaker 1: the eel curve, I think is is going to be important. 116 00:06:13,640 --> 00:06:15,120 Speaker 1: You know, if we would get down to flat or 117 00:06:15,160 --> 00:06:17,359 Speaker 1: in vetted you curve, I'd be a little bit more concerned. 118 00:06:17,400 --> 00:06:20,400 Speaker 1: But but right now, I'm I'm not given the fact 119 00:06:20,400 --> 00:06:23,280 Speaker 1: that although it's narrowed, it's we still have a relatively 120 00:06:23,279 --> 00:06:25,599 Speaker 1: step wheel curve. I mean, is that the nature of 121 00:06:25,600 --> 00:06:29,000 Speaker 1: of FED tightening cycle that the curve should flatten somewhat. 122 00:06:29,960 --> 00:06:32,960 Speaker 1: It doesn't and it should, but but at the same time, 123 00:06:33,000 --> 00:06:35,000 Speaker 1: the you know that, I guess the question is that 124 00:06:35,080 --> 00:06:37,840 Speaker 1: it's flattening. Uh, the extent to which is flattening on 125 00:06:37,920 --> 00:06:41,960 Speaker 1: such a gradual pace of of of of rate hikes. 126 00:06:42,000 --> 00:06:43,480 Speaker 1: And I think that that's where people are becoming a 127 00:06:43,480 --> 00:06:46,640 Speaker 1: little concerned. Did the models work? And I'm talking about 128 00:06:46,720 --> 00:06:49,839 Speaker 1: basic macro one oh one? I s L M. Paul 129 00:06:49,880 --> 00:06:53,760 Speaker 1: Krugman had a brilliant essay on his wheelof Skill, which 130 00:06:53,839 --> 00:06:57,240 Speaker 1: is international economics, to the models we have work? Or 131 00:06:57,279 --> 00:07:00,960 Speaker 1: are we so international, so global in our flows, in 132 00:07:01,040 --> 00:07:05,120 Speaker 1: the speed of transfer money, goods and services, that the 133 00:07:05,160 --> 00:07:09,120 Speaker 1: old models don't work? You know that? That's where I 134 00:07:09,120 --> 00:07:11,400 Speaker 1: think a lot of central bankers are beginning to question 135 00:07:11,440 --> 00:07:14,760 Speaker 1: their They're questioning their models, and particularly related to inflation, 136 00:07:14,760 --> 00:07:17,320 Speaker 1: and that their models told them that inflation would have 137 00:07:17,840 --> 00:07:20,120 Speaker 1: picked up by by more than than it didn't. But 138 00:07:20,160 --> 00:07:22,920 Speaker 1: we're so international like in our labor economy, that we're 139 00:07:22,920 --> 00:07:24,760 Speaker 1: not getting the wage growth, you know, and we get. 140 00:07:24,840 --> 00:07:27,160 Speaker 1: I think that's critical because obviously, I think most people 141 00:07:27,160 --> 00:07:30,360 Speaker 1: would agree that that globalization and the extent to which 142 00:07:30,360 --> 00:07:33,800 Speaker 1: global value chains have have increased. That's something that's been 143 00:07:33,800 --> 00:07:37,760 Speaker 1: a dampening factor on inflation. Technology has been a dampening 144 00:07:37,760 --> 00:07:40,600 Speaker 1: factor on inflation. But you know, you know, we've we've 145 00:07:40,680 --> 00:07:44,320 Speaker 1: we've talked about before the Phillips curve in the way 146 00:07:44,320 --> 00:07:46,120 Speaker 1: the FED, the FED looks at that that there's really 147 00:07:46,120 --> 00:07:49,320 Speaker 1: nothing that's if you look at the Phillips curve um, 148 00:07:49,760 --> 00:07:54,640 Speaker 1: particularly the Phillips curve for prime working age uh people, Um, 149 00:07:54,640 --> 00:07:57,760 Speaker 1: the Phillips curve still looks very similar to it as 150 00:07:57,800 --> 00:08:00,280 Speaker 1: in the past. So my expectation is that we are 151 00:08:00,280 --> 00:08:02,560 Speaker 1: going to see some pickup and wage growth, the FED 152 00:08:02,600 --> 00:08:06,000 Speaker 1: will start to doubt it's inflations inflation models a little 153 00:08:06,000 --> 00:08:09,040 Speaker 1: bit less um. And that's not necessarily because that those 154 00:08:09,120 --> 00:08:11,800 Speaker 1: wages are going to feed through into higher inflation. We 155 00:08:11,840 --> 00:08:13,600 Speaker 1: also have a lot of other things going on. UM. 156 00:08:13,640 --> 00:08:15,920 Speaker 1: I think the general view is that that Powell is 157 00:08:15,960 --> 00:08:18,360 Speaker 1: FED chair is going to just be a continuation of yelling. 158 00:08:18,400 --> 00:08:20,520 Speaker 1: But there's one area where that's not the case, and 159 00:08:20,560 --> 00:08:23,080 Speaker 1: I think that's on regulation. We've already started to see 160 00:08:23,080 --> 00:08:25,720 Speaker 1: some moves there, so um. You know, that's another issue 161 00:08:25,760 --> 00:08:28,040 Speaker 1: that the breakdown and the credit multiplier I think has 162 00:08:28,080 --> 00:08:30,400 Speaker 1: something to do with regulation, and that's something that's beginning 163 00:08:30,400 --> 00:08:33,440 Speaker 1: to shift. So we've seen a lot of tightening on 164 00:08:33,480 --> 00:08:37,240 Speaker 1: the credit side post credit crisis. The pendulum is swamp 165 00:08:37,559 --> 00:08:40,400 Speaker 1: swam from if you could fog a mirror, you get 166 00:08:40,400 --> 00:08:43,800 Speaker 1: a mortgage to We're gonna make everybody jump through the 167 00:08:43,840 --> 00:08:47,439 Speaker 1: most ridiculous hoops. How much of that comes from the FED, 168 00:08:47,520 --> 00:08:51,440 Speaker 1: how much of that comes from um Graham Dodd, and 169 00:08:51,480 --> 00:08:53,600 Speaker 1: how much of that is coming just from the banks 170 00:08:54,240 --> 00:08:57,679 Speaker 1: overreacting the way they did previously. I think it's a 171 00:08:57,720 --> 00:09:01,440 Speaker 1: comment I'd have a hard time, um, you know, quantifying 172 00:09:01,520 --> 00:09:03,839 Speaker 1: each of those, but I think they're all important. Um. 173 00:09:03,880 --> 00:09:08,400 Speaker 1: We know that one area that's changing is on on regulations, 174 00:09:08,400 --> 00:09:10,959 Speaker 1: not just the FED UM, but you know, for example, 175 00:09:11,160 --> 00:09:13,560 Speaker 1: the I think you could look at regulations and say 176 00:09:13,559 --> 00:09:16,360 Speaker 1: that it's someone was somewhat heavy handed as it relates 177 00:09:16,360 --> 00:09:19,080 Speaker 1: to smaller banks, and that's something that's already begun to change. 178 00:09:19,080 --> 00:09:21,600 Speaker 1: And the numbers that are being discussed with this shift 179 00:09:21,640 --> 00:09:24,319 Speaker 1: in the size of the bank, then that faces um 180 00:09:24,760 --> 00:09:27,120 Speaker 1: regulation by the by the federal oversight by the FED 181 00:09:27,360 --> 00:09:29,680 Speaker 1: UM could reduce the number of banks from forty to 182 00:09:29,760 --> 00:09:32,480 Speaker 1: twelve UM. And and so it is there is some 183 00:09:33,000 --> 00:09:36,000 Speaker 1: um shifts I think happening on that front um and 184 00:09:36,040 --> 00:09:39,000 Speaker 1: the heavy handedness of regulation that that that pendulum has 185 00:09:39,040 --> 00:09:53,600 Speaker 1: begun to swing a bit in the other direction. Very 186 00:09:53,600 --> 00:09:56,840 Speaker 1: real this morning. And if you sort of waking up 187 00:09:56,840 --> 00:10:00,640 Speaker 1: but going okay, what's the price of all that's going 188 00:10:00,679 --> 00:10:04,480 Speaker 1: on in Washington. This is the most important half hour 189 00:10:04,520 --> 00:10:06,839 Speaker 1: of the day. This is the most important interview of 190 00:10:06,880 --> 00:10:11,559 Speaker 1: the day. He is, without question our advisor on fiscal affairs. 191 00:10:12,080 --> 00:10:16,240 Speaker 1: Stand Calendar in the trenches for years of Capitol Hill. 192 00:10:16,520 --> 00:10:20,120 Speaker 1: Years ago he did a Manhattan phone book of analysis 193 00:10:20,160 --> 00:10:22,840 Speaker 1: on the dynamics of the budget. And now we just 194 00:10:22,920 --> 00:10:26,680 Speaker 1: want to know Stand Calendar, the view from sixty feet 195 00:10:27,080 --> 00:10:30,920 Speaker 1: how much will the deficit expand over the next decade 196 00:10:31,400 --> 00:10:35,920 Speaker 1: given all the tax cut reform love on Capitol Hill. Well, 197 00:10:36,000 --> 00:10:38,560 Speaker 1: if you look at the the analysis put out by 198 00:10:38,600 --> 00:10:42,240 Speaker 1: the University of Pennsylvania yesterday, it said anywhere from one 199 00:10:42,280 --> 00:10:44,559 Speaker 1: and a half to two trillion dollars over the next 200 00:10:44,600 --> 00:10:48,080 Speaker 1: ten years. Uh. That's pretty consistent with a variety of 201 00:10:48,080 --> 00:10:50,400 Speaker 1: other analyses that have come out. The only way you 202 00:10:50,440 --> 00:10:52,640 Speaker 1: don't get there, The only way you you do what 203 00:10:52,720 --> 00:10:55,959 Speaker 1: Steve Manuchin said, Uh, uh and said it's going to 204 00:10:56,000 --> 00:10:59,160 Speaker 1: pay for itself is with growth that would be virtually unprecedented. 205 00:10:59,200 --> 00:11:02,200 Speaker 1: We even burying growth that level over over that period 206 00:11:02,200 --> 00:11:07,679 Speaker 1: of time. Can can good politicians on Capitol Hill, desirous 207 00:11:07,720 --> 00:11:11,600 Speaker 1: of getting re elected, can they go with Mr manutition 208 00:11:11,679 --> 00:11:14,880 Speaker 1: on the leap of faith of economic growth? Oh? Sure, 209 00:11:15,400 --> 00:11:18,520 Speaker 1: Look this this tax bill has nothing to do with 210 00:11:18,559 --> 00:11:21,600 Speaker 1: the economy. Uh. It's it's not as if the economy 211 00:11:21,600 --> 00:11:25,320 Speaker 1: needs stimulus right now. In fact, it probably almost certainly doesn't. Uh. 212 00:11:25,320 --> 00:11:28,559 Speaker 1: This is a tax bill that's not economic in origin. 213 00:11:28,640 --> 00:11:32,200 Speaker 1: It's totally political. So the President Republican can say, we 214 00:11:32,240 --> 00:11:35,560 Speaker 1: did what we promised we would do. Um, this is 215 00:11:35,600 --> 00:11:38,720 Speaker 1: a the Trump family tax and family and friends tax cut. 216 00:11:38,800 --> 00:11:41,720 Speaker 1: This is gonna not help the voters who voted for Trump, 217 00:11:42,000 --> 00:11:45,440 Speaker 1: but help the rich and uh Trump family. I mean, Barry, 218 00:11:45,480 --> 00:11:48,000 Speaker 1: that's the first time I've heard that. Stand clear, he 219 00:11:48,200 --> 00:11:51,800 Speaker 1: is Barry jumps in. You're calling this the Trump family 220 00:11:51,840 --> 00:11:56,280 Speaker 1: and friends tax cut. I am, Yes. Indeed, So, Stan, 221 00:11:56,840 --> 00:11:59,160 Speaker 1: we have one version that comes out of the House 222 00:11:59,679 --> 00:12:04,600 Speaker 1: that's fairly um aggressive, and then something that I think 223 00:12:04,640 --> 00:12:07,760 Speaker 1: it's safe to say is a little more realistic out 224 00:12:07,800 --> 00:12:11,280 Speaker 1: of the Senate. What's the final version of this gonna 225 00:12:11,360 --> 00:12:14,679 Speaker 1: look like? If you if you have to pick a number, 226 00:12:15,000 --> 00:12:19,480 Speaker 1: corporate tax rate, the LLC passed through. What what do 227 00:12:19,480 --> 00:12:21,240 Speaker 1: you see really coming out of this one all of 228 00:12:21,320 --> 00:12:24,160 Speaker 1: said and done. Well, First of all, is I have 229 00:12:24,200 --> 00:12:26,360 Speaker 1: a question of whether or not what the Senate passes 230 00:12:26,360 --> 00:12:29,480 Speaker 1: will be acceptable to the House. Ultimately, it probably will 231 00:12:29,520 --> 00:12:33,320 Speaker 1: be because they're they're so desperate to get something anything. 232 00:12:34,120 --> 00:12:36,280 Speaker 1: But what is that is that just we want to 233 00:12:36,280 --> 00:12:38,160 Speaker 1: win and we don't care what it looks like or 234 00:12:38,280 --> 00:12:40,920 Speaker 1: well we promised everybody we would do it. We don't 235 00:12:40,920 --> 00:12:43,280 Speaker 1: want to get the president's tweets criticizing us for not 236 00:12:43,360 --> 00:12:47,640 Speaker 1: doing it. We want to reward our contributors uh and 237 00:12:47,640 --> 00:12:51,200 Speaker 1: and and encourage them to contribute more for the next election. Again, 238 00:12:51,200 --> 00:12:53,960 Speaker 1: this has nothing to do with the economy, uh, because 239 00:12:54,000 --> 00:12:56,280 Speaker 1: I think everybody I hear on Bloomberg tells me that 240 00:12:56,720 --> 00:12:58,760 Speaker 1: it's not going to produce the level of group group 241 00:12:58,960 --> 00:13:02,719 Speaker 1: growth that does that the administration is claiming um and 242 00:13:02,760 --> 00:13:05,640 Speaker 1: it and it's not like the Fed requires stimulus. In fact, 243 00:13:05,679 --> 00:13:07,600 Speaker 1: it's probably going to result in higher interest rates. But 244 00:13:07,920 --> 00:13:09,960 Speaker 1: to get to your basic question, I think what comes 245 00:13:09,960 --> 00:13:12,360 Speaker 1: out of the Senate is more likely to be what 246 00:13:12,760 --> 00:13:15,720 Speaker 1: we see as a final version UM. And that's a 247 00:13:15,840 --> 00:13:20,400 Speaker 1: problem for the House members from New York, New Jersey, 248 00:13:20,440 --> 00:13:23,960 Speaker 1: California Republican House members because of the high because of 249 00:13:24,000 --> 00:13:26,640 Speaker 1: the Senate tax bill does away with the deduction for 250 00:13:26,640 --> 00:13:30,400 Speaker 1: state and local taxes UM. So you know, I would 251 00:13:30,400 --> 00:13:32,600 Speaker 1: still give this a fifty fifty chance of passing by 252 00:13:32,600 --> 00:13:34,760 Speaker 1: the end of the year. But if it doesn't pass 253 00:13:34,800 --> 00:13:36,360 Speaker 1: by the end of the year, the chances of it 254 00:13:36,400 --> 00:13:39,880 Speaker 1: passing it all go down pretty precipitously. So the realtors 255 00:13:39,880 --> 00:13:42,600 Speaker 1: groups have all been screaming about the changes to the 256 00:13:42,640 --> 00:13:46,240 Speaker 1: mortgage deduction, and even the n f I B, which 257 00:13:46,280 --> 00:13:49,160 Speaker 1: is about as pro business a group and pro tax 258 00:13:49,240 --> 00:13:52,480 Speaker 1: cut a group as you're gonna find, came out and 259 00:13:52,240 --> 00:13:56,599 Speaker 1: and oppose the House version, saying the s CORP and 260 00:13:56,760 --> 00:14:01,600 Speaker 1: LLC adjustments exempt far too many small businesses so that 261 00:14:01,640 --> 00:14:04,480 Speaker 1: they can support it. How are the how is the 262 00:14:04,559 --> 00:14:09,240 Speaker 1: pushback from lobbyists affecting what the final version is gonna 263 00:14:09,320 --> 00:14:13,160 Speaker 1: end up looking like? Well, the answer is not much yet. Uh. 264 00:14:13,160 --> 00:14:15,600 Speaker 1: And I want to emphasize the word yet, the longer 265 00:14:15,679 --> 00:14:17,880 Speaker 1: this bill sits out there, the longer it takes for 266 00:14:17,920 --> 00:14:21,160 Speaker 1: them to debate it, uh and to vote on it. Um, 267 00:14:21,400 --> 00:14:23,280 Speaker 1: the more likely it is or the less likely it 268 00:14:23,360 --> 00:14:25,920 Speaker 1: is that it's going to pass. That's because all the 269 00:14:25,960 --> 00:14:28,160 Speaker 1: groups you mentioned plus others are going to be able 270 00:14:28,200 --> 00:14:31,400 Speaker 1: to tread to communicate to their memories how bad this 271 00:14:31,440 --> 00:14:33,760 Speaker 1: is for them, Um, you know one of them. One 272 00:14:33,760 --> 00:14:36,080 Speaker 1: of the big problems with this bill is that for 273 00:14:36,240 --> 00:14:38,920 Speaker 1: the average person is that it's being debated so quickly 274 00:14:38,920 --> 00:14:41,000 Speaker 1: that they don't know what's in it. We have so 275 00:14:41,080 --> 00:14:42,760 Speaker 1: much to talk about. We're gonna come back from Mr 276 00:14:42,840 --> 00:14:45,960 Speaker 1: Collender at the Budget guy out on Twitter, and we're 277 00:14:45,960 --> 00:14:49,920 Speaker 1: gonna talk to Stan Condor about some of the ideas 278 00:14:49,960 --> 00:14:53,760 Speaker 1: here peripheral to the tax reform slash cut. I want 279 00:14:53,760 --> 00:14:58,040 Speaker 1: to talk about this idea of analysis of the federal 280 00:14:58,360 --> 00:15:03,160 Speaker 1: bracket as is compared to the all in tax bill 281 00:15:03,880 --> 00:15:07,760 Speaker 1: that Tom Keene has versus John Tucker, because John Tucker, 282 00:15:07,840 --> 00:15:11,880 Speaker 1: you enjoy property texts in New Jersey, and you know 283 00:15:11,920 --> 00:15:13,600 Speaker 1: what I get for that? What do you get for 284 00:15:14,400 --> 00:15:20,040 Speaker 1: close your eyes? What do you see when you get 285 00:15:20,040 --> 00:15:23,560 Speaker 1: a tax production? Though I had a tax today, he 286 00:15:23,680 --> 00:15:26,280 Speaker 1: had one, As they say, Welcome back from Stan Condor 287 00:15:26,720 --> 00:15:31,920 Speaker 1: on your all in tax This is Bloomberg Brittan a 288 00:15:32,000 --> 00:15:34,840 Speaker 1: Pakistan condor, but very quickly a World Cup update around 289 00:15:34,880 --> 00:15:38,560 Speaker 1: is incredibly busy schedule here at Bloomberg, John Farroll, you 290 00:15:38,640 --> 00:15:42,400 Speaker 1: come from the Midlands of Coventry. Coventry was relegated like 291 00:15:42,440 --> 00:15:45,200 Speaker 1: in the e FL, and there's like the updown oddities 292 00:15:45,240 --> 00:15:48,880 Speaker 1: of English soccer. How how bad is Coventry this year? 293 00:15:49,000 --> 00:15:51,920 Speaker 1: Are they worse than the Italians? Coventry a pretty bad 294 00:15:52,080 --> 00:15:54,320 Speaker 1: once again, to the extent that we don't even talk 295 00:15:54,400 --> 00:15:56,680 Speaker 1: about it in my town, which is about tem and 296 00:15:56,720 --> 00:15:58,800 Speaker 1: it's awife from Coventry. But I always had the blessing 297 00:15:58,840 --> 00:16:01,560 Speaker 1: tom that my father it was Italian, so I didn't 298 00:16:01,600 --> 00:16:04,200 Speaker 1: have to support the English teams and in Italy when 299 00:16:04,200 --> 00:16:05,920 Speaker 1: I used to be a good thing. Why is Italy 300 00:16:06,000 --> 00:16:10,400 Speaker 1: World Cup football different than what we see in Premier League. 301 00:16:10,400 --> 00:16:13,640 Speaker 1: It's national teams only that makes the massive difference. It's 302 00:16:13,640 --> 00:16:16,400 Speaker 1: not what's a cultural difference. In the cultural difference is 303 00:16:16,440 --> 00:16:18,720 Speaker 1: that they play the same game. But Italy wins a 304 00:16:18,720 --> 00:16:21,360 Speaker 1: whole lot more in terms of the English national team 305 00:16:21,440 --> 00:16:24,240 Speaker 1: versus Italy. Italy have won four World Cup six finals 306 00:16:24,480 --> 00:16:27,880 Speaker 1: and they've been in every single World Cup. Since how 307 00:16:28,000 --> 00:16:32,880 Speaker 1: did this happen? They did even well? The news rich 308 00:16:33,080 --> 00:16:35,880 Speaker 1: everyone knows the news. Italy's not going to the World Cup. 309 00:16:36,200 --> 00:16:39,800 Speaker 1: How did this happen? How did dominate? I don't know, 310 00:16:39,960 --> 00:16:43,040 Speaker 1: and I still sit here scratching my head. I'm morning today. 311 00:16:43,280 --> 00:16:45,760 Speaker 1: Did you stop drinking from last night? I stopped. I 312 00:16:45,760 --> 00:16:48,040 Speaker 1: stopped drinking pretty early on when I when I had 313 00:16:48,080 --> 00:16:50,200 Speaker 1: to go back, and then and then I had to 314 00:16:50,240 --> 00:16:52,680 Speaker 1: come on TV this morning, and Barry, it's been a 315 00:16:52,720 --> 00:16:56,200 Speaker 1: it's been a tough So where we have a huge 316 00:16:56,280 --> 00:17:00,320 Speaker 1: upset in either football or basketball in the US, it's 317 00:17:00,360 --> 00:17:06,560 Speaker 1: often things like injuries are beard, officiating call some extraneous 318 00:17:06,560 --> 00:17:11,320 Speaker 1: event that leads the statistics to go off the rails. 319 00:17:11,359 --> 00:17:14,639 Speaker 1: Nothing like that in in this just a better team 320 00:17:15,000 --> 00:17:18,120 Speaker 1: will say. A very ugly conversation is going to start 321 00:17:18,160 --> 00:17:19,680 Speaker 1: to evolve in the coming days, and it's going to 322 00:17:19,760 --> 00:17:22,760 Speaker 1: revolve around how many foreigners play in the Italian domestic 323 00:17:22,760 --> 00:17:25,639 Speaker 1: football club league? So what does that mean? What it 324 00:17:25,680 --> 00:17:28,480 Speaker 1: means is if more foreigners play competitive football in your 325 00:17:28,480 --> 00:17:31,200 Speaker 1: domestic league, it means that as the youth comes up 326 00:17:31,240 --> 00:17:34,399 Speaker 1: the Italians, the young players don't get the opportunities in 327 00:17:34,400 --> 00:17:37,040 Speaker 1: the first team to play elite football. This is an 328 00:17:37,160 --> 00:17:40,440 Speaker 1: argument that's often made in various leagues when the national 329 00:17:40,520 --> 00:17:42,960 Speaker 1: team doesn't do so well. For me, it's going to 330 00:17:43,080 --> 00:17:46,919 Speaker 1: become ugly because there's an Italian election next year with 331 00:17:47,040 --> 00:17:49,600 Speaker 1: the populist parties trying to get a foothold with the 332 00:17:49,600 --> 00:17:53,680 Speaker 1: electorate and sometimes in a very dirty way. These kind 333 00:17:53,720 --> 00:17:56,520 Speaker 1: of arguments can residents. So Sweden doesn't have the same issues. 334 00:17:56,760 --> 00:17:58,880 Speaker 1: The UK doesn't have the same issues with the UK has. 335 00:17:59,000 --> 00:18:01,040 Speaker 1: The UK has exact actually the same issues, and the 336 00:18:01,880 --> 00:18:04,160 Speaker 1: under performance of the England national team over the last 337 00:18:04,160 --> 00:18:06,400 Speaker 1: several decades a lot of people have cited that as 338 00:18:06,440 --> 00:18:10,760 Speaker 1: an issue, so there is some consistency. There is Sheffield 339 00:18:10,880 --> 00:18:13,960 Speaker 1: United like the arch enemies of Coventry. No, No, No, 340 00:18:14,480 --> 00:18:17,479 Speaker 1: aston Villa, aston Ville. You've got to get your geography right. 341 00:18:17,520 --> 00:18:21,480 Speaker 1: Sheffield United is Northern England and coventaries in the Midlands. 342 00:18:21,480 --> 00:18:23,679 Speaker 1: I'm going to leave you with a final point. Italy 343 00:18:23,800 --> 00:18:26,240 Speaker 1: might still be out of the World Cup, but an 344 00:18:26,240 --> 00:18:30,800 Speaker 1: Italian still rules the world. For to Mario Drug, you're 345 00:18:30,880 --> 00:18:38,119 Speaker 1: just it's just magic Bloomberg Radio and both on Bloomberg 346 00:18:38,200 --> 00:18:41,639 Speaker 1: Radio and I should be on Bloomberg TV. What is 347 00:18:41,720 --> 00:18:45,560 Speaker 1: drugs penalty kick percentages? You do? It's better than the 348 00:18:45,600 --> 00:18:49,040 Speaker 1: Italian national team. And I've got back to television John Farrell. 349 00:18:49,119 --> 00:18:52,280 Speaker 1: We decided that when we talk soccer it's better with 350 00:18:52,280 --> 00:18:55,280 Speaker 1: the British accent. So that Farrell in here. We're back 351 00:18:55,280 --> 00:18:57,760 Speaker 1: with standing car under the budget. Guy, thank you stand 352 00:18:57,840 --> 00:19:00,800 Speaker 1: for our digression and Mr Farrell over there Italy World 353 00:19:00,800 --> 00:19:04,439 Speaker 1: Cup stand dead serious on the budget. Holt Zeekin is 354 00:19:04,480 --> 00:19:08,600 Speaker 1: better than good Douglas Holtzkin taking his PhD under Bernandcia Princeton. 355 00:19:08,960 --> 00:19:11,719 Speaker 1: He's got a vector a five, six or seven percent 356 00:19:12,119 --> 00:19:14,960 Speaker 1: deficit the g d P. Do you have a greater 357 00:19:15,119 --> 00:19:19,639 Speaker 1: confidence in that deterioration of our deficit the GDP because 358 00:19:19,640 --> 00:19:23,600 Speaker 1: of all this text cup talk. No, Look, the bottom 359 00:19:23,680 --> 00:19:26,359 Speaker 1: line is that it's the deficit to GDP ratio was 360 00:19:26,359 --> 00:19:28,000 Speaker 1: clearly going up and is going to go up for 361 00:19:28,040 --> 00:19:32,080 Speaker 1: twenty years under this plan unless it's changed. Twenty years. Wow, 362 00:19:32,119 --> 00:19:35,480 Speaker 1: that's that's a big statement. Well, remember that all the 363 00:19:35,640 --> 00:19:38,320 Speaker 1: estimates of the one to two one of the two 364 00:19:38,359 --> 00:19:41,560 Speaker 1: trillion dollar loss in revenue uh an increase in the 365 00:19:41,680 --> 00:19:43,879 Speaker 1: debt is only over the first ten years. Over the 366 00:19:43,920 --> 00:19:47,359 Speaker 1: second ten years, it goes up by by almost double that. So, 367 00:19:47,359 --> 00:19:49,960 Speaker 1: so are we gonna see the same sort of game 368 00:19:50,000 --> 00:19:52,480 Speaker 1: we saw with the Bush tax cuts of making this 369 00:19:52,600 --> 00:19:56,240 Speaker 1: quote unquote temporary by sunsetting after ten years, or he's 370 00:19:56,240 --> 00:19:58,320 Speaker 1: going to be permanent. No, No, some of it. You've 371 00:19:58,320 --> 00:20:00,040 Speaker 1: already seen some of the some of the d of 372 00:20:00,119 --> 00:20:04,800 Speaker 1: the gimmicks that they're using, Rosie economic scenarios, dynamic scoring, uh, 373 00:20:05,359 --> 00:20:09,600 Speaker 1: phase out, phases, phases in, and people basically passing in 374 00:20:09,640 --> 00:20:12,960 Speaker 1: now and saying we'll worry about the consequences. Leader um, 375 00:20:13,160 --> 00:20:15,879 Speaker 1: I I expect that if this passes, it will be 376 00:20:15,880 --> 00:20:18,480 Speaker 1: because a lot of people are fooling themselves about economic growth. 377 00:20:18,920 --> 00:20:21,480 Speaker 1: But we also remember when Ronald Reagan signed that big 378 00:20:21,520 --> 00:20:26,960 Speaker 1: tax cut, uh, he then subsequently increases. Okay, but but 379 00:20:27,000 --> 00:20:29,040 Speaker 1: there's a major difference here standing. You know the chart 380 00:20:29,080 --> 00:20:31,359 Speaker 1: I've been using out on Bloomberg even though you ignore us, 381 00:20:31,359 --> 00:20:34,439 Speaker 1: it never come on air. But the bottom line, stand 382 00:20:34,600 --> 00:20:37,800 Speaker 1: is a debt to the debt to GDP was thirty 383 00:20:37,840 --> 00:20:40,879 Speaker 1: percentage forty percentage on the Reagan and now I believe 384 00:20:40,920 --> 00:20:43,719 Speaker 1: it's a hundred or just over a hundred percent. Where's 385 00:20:43,760 --> 00:20:48,520 Speaker 1: the calendar tipping point where that becomes critical to the 386 00:20:48,600 --> 00:20:51,320 Speaker 1: House and the Senate as they figure out fiscal policy. 387 00:20:51,400 --> 00:20:53,400 Speaker 1: All right, that you've asked two questions. First of all, 388 00:20:53,400 --> 00:20:56,440 Speaker 1: when does it become critical? Nobody knows because we've never 389 00:20:56,520 --> 00:20:59,080 Speaker 1: quite been in this situation before, in the peace time, 390 00:20:59,320 --> 00:21:02,520 Speaker 1: in a peace time budget with the debt to deficit 391 00:21:02,640 --> 00:21:05,639 Speaker 1: ratio and in ratio of GDP do UH to debt 392 00:21:06,000 --> 00:21:07,760 Speaker 1: being as high as it as, We've never been there. 393 00:21:08,040 --> 00:21:09,760 Speaker 1: But the real question who asked is when does it 394 00:21:09,760 --> 00:21:12,280 Speaker 1: become a tipping point on Capitol Hill? And the answer 395 00:21:12,400 --> 00:21:16,400 Speaker 1: is not anytime soon. This is a damn, the damn, 396 00:21:16,440 --> 00:21:19,640 Speaker 1: the torpedo's damn, the debt full speed ahead. We're gonna 397 00:21:19,640 --> 00:21:23,520 Speaker 1: We're gonna pass this because we want to pass it. 398 00:21:23,640 --> 00:21:27,920 Speaker 1: St Stiglets, among others, has a little G for the 399 00:21:27,960 --> 00:21:32,640 Speaker 1: growth rate of any given economy. When does your world 400 00:21:33,480 --> 00:21:38,000 Speaker 1: run up against the little G of the US growth economy? 401 00:21:38,520 --> 00:21:41,560 Speaker 1: Is it like now or is it our children's now? No? No, 402 00:21:41,640 --> 00:21:44,920 Speaker 1: it's it's not now, um And it's probably it could 403 00:21:44,920 --> 00:21:47,920 Speaker 1: easily be before the two thousand twenty election, but it's 404 00:21:47,960 --> 00:21:50,280 Speaker 1: more likely to be after and that the politicians are 405 00:21:50,280 --> 00:21:54,840 Speaker 1: betting on. So what are the responses from the group 406 00:21:54,960 --> 00:21:58,280 Speaker 1: of uh. Some people call him deficit hawks. I'd like 407 00:21:58,320 --> 00:22:02,080 Speaker 1: to call him deficit chicken hawks, the people who refuse 408 00:22:02,240 --> 00:22:08,240 Speaker 1: to pass more aggressive infrastructure spending fiscal stimulus right in 409 00:22:08,320 --> 00:22:13,199 Speaker 1: the middle of the financial crisis, which, according to traditional economics, 410 00:22:13,240 --> 00:22:15,880 Speaker 1: is when you want to see that fiscal stimulus. How 411 00:22:15,920 --> 00:22:18,960 Speaker 1: have they done A one eight and ten years later 412 00:22:19,080 --> 00:22:23,320 Speaker 1: said now with unemployment in the fours and then and 413 00:22:23,440 --> 00:22:26,239 Speaker 1: the economy doing fairly well, now is where we're going 414 00:22:26,280 --> 00:22:30,320 Speaker 1: to have a big fiscal stimulus. Yeah, that circle. The 415 00:22:30,640 --> 00:22:33,359 Speaker 1: deficit talks, It's not clear they ever existed before. It 416 00:22:33,400 --> 00:22:36,160 Speaker 1: was always a subterfuge to prevent things happening that they 417 00:22:36,160 --> 00:22:39,359 Speaker 1: didn't like. But I thank you for columns and Forbes 418 00:22:39,359 --> 00:22:41,280 Speaker 1: that have said the things like the Freedom Caucus or 419 00:22:41,320 --> 00:22:44,280 Speaker 1: deficit frauds. At the Republicans Party, which has been so 420 00:22:44,440 --> 00:22:47,399 Speaker 1: deficit deficite talks in the past, has shown itself to 421 00:22:47,440 --> 00:22:51,200 Speaker 1: be uninterested when they're in charge. So this is don't 422 00:22:51,240 --> 00:22:53,520 Speaker 1: let me state this as directly as possible. This essentially 423 00:22:53,520 --> 00:22:56,560 Speaker 1: is the end of fiscal policy making in Washington. It's 424 00:22:56,600 --> 00:22:59,040 Speaker 1: hard to see how we ever go back to interesting 425 00:22:59,080 --> 00:23:02,080 Speaker 1: deficit in debt. This has been great sin Conder valuable. 426 00:23:02,119 --> 00:23:04,479 Speaker 1: Thank you so much at the budget. Guy on Twitter 427 00:23:04,840 --> 00:23:06,919 Speaker 1: can't say enough about his work, and we'll have on 428 00:23:07,080 --> 00:23:09,760 Speaker 1: much more as we migrate to the end of the year. 429 00:23:09,960 --> 00:23:12,640 Speaker 1: We've got a couple of conversations. Alex in London, thank 430 00:23:12,680 --> 00:23:17,720 Speaker 1: you for your comments on Sheffield and Coventry. He was 431 00:23:17,840 --> 00:23:22,159 Speaker 1: dazzled by my football knowledge. Good Morning Boston one or 432 00:23:22,200 --> 00:23:24,640 Speaker 1: six one FM Bloomberg one or six one FM Boston. 433 00:23:25,359 --> 00:23:28,680 Speaker 1: The Valley Lumber Company, we've been doing two by fours 434 00:23:28,720 --> 00:23:33,960 Speaker 1: at home depot. Harold and Geraldine love Leavely. I think 435 00:23:34,160 --> 00:23:39,720 Speaker 1: level L V A L L E Y. I don't 436 00:23:39,720 --> 00:23:44,480 Speaker 1: know Vermont, New Hampshire, New York State. Well, the valley is, 437 00:23:44,760 --> 00:23:48,439 Speaker 1: it's got a valley in it. It's a great lumber company, 438 00:23:48,480 --> 00:23:52,399 Speaker 1: I'm told, with guaranteed straight two by four st up 439 00:23:52,400 --> 00:23:54,800 Speaker 1: in the snows of Vermont in New Hampshire. We say 440 00:23:54,800 --> 00:23:58,159 Speaker 1: good morning. We're hearing from lumber companies all around this 441 00:23:58,200 --> 00:24:01,280 Speaker 1: great nation. Want straight two by fours. You can't use 442 00:24:01,320 --> 00:24:04,359 Speaker 1: a warped two by four. Well, I actually have the 443 00:24:05,680 --> 00:24:09,159 Speaker 1: straighten them out. I have my techniques. We are we 444 00:24:09,200 --> 00:24:13,159 Speaker 1: are getting in in a bind right. I have a 445 00:24:13,240 --> 00:24:16,199 Speaker 1: jointer and a planner. Oh really, can you do a 446 00:24:16,200 --> 00:24:18,760 Speaker 1: lot of woodwork? Oh yeah, okay, we haven't seen some 447 00:24:18,800 --> 00:24:21,040 Speaker 1: of my work. I have a leaf blower and I 448 00:24:21,040 --> 00:24:25,159 Speaker 1: will occasionally blow leaves. It's not the same, it's not 449 00:24:25,280 --> 00:24:28,240 Speaker 1: the same thing. I can do that. I can do 450 00:24:28,320 --> 00:24:30,840 Speaker 1: that on my own. Can we go to Home Deep 451 00:24:32,160 --> 00:24:35,760 Speaker 1: do a field trip? They're around here, you know, I 452 00:24:35,760 --> 00:24:38,120 Speaker 1: mean the full Home Deep on. But going with John 453 00:24:38,160 --> 00:24:40,480 Speaker 1: Tucker is a different experience. You have to go to 454 00:24:40,560 --> 00:24:44,639 Speaker 1: one of the full size superstaries that's not suburb clients 455 00:24:44,720 --> 00:24:46,760 Speaker 1: like the Manhattan So I can take uber out and 456 00:24:46,760 --> 00:24:49,560 Speaker 1: you and I could do that. Absolutely. This is Bloomberg 457 00:24:49,640 --> 00:25:02,800 Speaker 1: with Barry Dholts and John Tucker. Good morning. This is 458 00:25:02,800 --> 00:25:05,800 Speaker 1: a joy on emerging markets. Rogie Jen with us with 459 00:25:05,920 --> 00:25:11,600 Speaker 1: a g q G Partners and they are in emerging markets. 460 00:25:11,760 --> 00:25:14,920 Speaker 1: And I believe they have timed the set up. Well, 461 00:25:14,960 --> 00:25:17,879 Speaker 1: you were vantable and you go over did you time 462 00:25:18,000 --> 00:25:22,960 Speaker 1: perfectly setting up your own shop involving billions of dollars? 463 00:25:23,400 --> 00:25:25,880 Speaker 1: And like everybody said, okay, jeeves out of his own 464 00:25:25,960 --> 00:25:29,639 Speaker 1: let's have a bowl market. Is that how it worked out? Yeah? Well, 465 00:25:29,680 --> 00:25:32,040 Speaker 1: I think I think, I think, um the timing turned 466 00:25:32,040 --> 00:25:35,040 Speaker 1: out to be you know, reasonable but obviously that nobody needs. 467 00:25:35,119 --> 00:25:37,160 Speaker 1: And the emerging markets coming out of a long band market, 468 00:25:37,200 --> 00:25:39,600 Speaker 1: and I think we understand an early stages, have any 469 00:25:39,600 --> 00:25:41,879 Speaker 1: compared to Europe and other places. Let me get Berry's 470 00:25:41,920 --> 00:25:44,720 Speaker 1: got a million questions on this. My key one is 471 00:25:44,720 --> 00:25:48,199 Speaker 1: is the emerging markets in the textbooks ten twenty and 472 00:25:48,280 --> 00:25:52,199 Speaker 1: thirty years ago, is that still true today? Or is 473 00:25:52,200 --> 00:25:57,359 Speaker 1: it a new dynamic to equity investment in emerging markets? 474 00:25:56,760 --> 00:25:59,159 Speaker 1: It it's it's it's a very different dynamic. I mean, 475 00:25:59,200 --> 00:26:00,880 Speaker 1: if I go back to the nineties when I started 476 00:26:00,920 --> 00:26:03,479 Speaker 1: hearing emerging market funds, I mean it was much more 477 00:26:03,520 --> 00:26:06,000 Speaker 1: about exporter entered companies. There wasn't there wasn't much of 478 00:26:06,080 --> 00:26:08,159 Speaker 1: domestic economy as such. Right if you go back the 479 00:26:08,280 --> 00:26:11,320 Speaker 1: nineties now, if you go to this, the decade after 480 00:26:11,400 --> 00:26:13,600 Speaker 1: that and the two thousands were much more commodity even 481 00:26:13,640 --> 00:26:15,520 Speaker 1: bowl market. Now today if you look at it as 482 00:26:15,600 --> 00:26:18,639 Speaker 1: much more technology driven, and the domestic consumption patterns have 483 00:26:18,720 --> 00:26:22,000 Speaker 1: also shifted away from what the consumer staples, you know, 484 00:26:22,119 --> 00:26:24,280 Speaker 1: the the quase that the co co co cola is, 485 00:26:24,359 --> 00:26:27,359 Speaker 1: the the cold gates, the unilevers, away from that into 486 00:26:27,440 --> 00:26:29,760 Speaker 1: much more of tech consumptions, of which I feel is 487 00:26:29,760 --> 00:26:32,640 Speaker 1: the new consumer is really given by that rather than 488 00:26:32,720 --> 00:26:35,600 Speaker 1: and obviously you know, the finance part of it. You 489 00:26:35,760 --> 00:26:38,240 Speaker 1: very much anticipate in my question, which was gonna be 490 00:26:38,880 --> 00:26:41,679 Speaker 1: a decade or two ago, the strength of weakness of 491 00:26:41,680 --> 00:26:46,080 Speaker 1: the dollar was perhaps the most important factor, uh for 492 00:26:46,240 --> 00:26:51,119 Speaker 1: these countries that were so commodity and export dependent. How 493 00:26:51,240 --> 00:26:54,320 Speaker 1: significant is the strength of the dollar If they're moving 494 00:26:54,359 --> 00:26:57,639 Speaker 1: away from commodities, it's it's a lot less important. So 495 00:26:57,680 --> 00:26:59,440 Speaker 1: if you look at them, an aging trade as such 496 00:26:59,480 --> 00:27:02,920 Speaker 1: that depends on US has gone down dramatically. India was 497 00:27:02,920 --> 00:27:04,960 Speaker 1: always a lot more domestic economy, but if you at 498 00:27:05,000 --> 00:27:09,480 Speaker 1: China itself, their exports overall have not come down despite 499 00:27:09,520 --> 00:27:12,160 Speaker 1: shifting the low value added stuff to you know, Vietnam 500 00:27:12,200 --> 00:27:14,320 Speaker 1: AND's Banttaladesh of this ward. So so I think I 501 00:27:14,359 --> 00:27:17,359 Speaker 1: think I think it's still seem remains uh to be 502 00:27:17,520 --> 00:27:21,080 Speaker 1: seen if there's a massive run in dollar, which I 503 00:27:21,119 --> 00:27:23,800 Speaker 1: don't really anticipate, but I think I think there's a 504 00:27:23,880 --> 00:27:27,880 Speaker 1: lot more domestic story, not staples, but other domestic stories. So, 505 00:27:27,880 --> 00:27:31,440 Speaker 1: so you mentioned India, we've we've looked at China as 506 00:27:31,480 --> 00:27:35,240 Speaker 1: a big driver of the past decade, two decades of 507 00:27:35,320 --> 00:27:41,040 Speaker 1: not only commodity consumption, but manufacturing and export. When is 508 00:27:41,200 --> 00:27:46,639 Speaker 1: India gonna start impacting the global economy similarly to China. 509 00:27:46,680 --> 00:27:49,440 Speaker 1: I know it's much smaller in terms of land mass, 510 00:27:49,480 --> 00:27:51,920 Speaker 1: but it's still more than a billion people and much 511 00:27:51,960 --> 00:27:56,040 Speaker 1: more high tech, h and software driven than China seems 512 00:27:56,080 --> 00:27:57,960 Speaker 1: to be. I think. I think if you look, if 513 00:27:57,960 --> 00:28:00,359 Speaker 1: you're talking to the commodity companies and they're as emits 514 00:28:00,480 --> 00:28:03,040 Speaker 1: on a go forward basis, one of the key to 515 00:28:03,080 --> 00:28:05,680 Speaker 1: hours would be consumption from India because they're a tremendous 516 00:28:05,680 --> 00:28:08,159 Speaker 1: amount of reforms that have taken place. So while the 517 00:28:08,200 --> 00:28:11,679 Speaker 1: corporate learning picture doesn't look that good, I'm pretty bolish 518 00:28:11,720 --> 00:28:13,760 Speaker 1: in terms of the infrastructre investment that's going to take place. 519 00:28:13,800 --> 00:28:17,240 Speaker 1: While China is becoming less capital intensive, our capital formation 520 00:28:17,280 --> 00:28:19,680 Speaker 1: is going down in the same rate. So I think 521 00:28:19,720 --> 00:28:21,639 Speaker 1: I think India would be a key driver from a 522 00:28:21,680 --> 00:28:25,680 Speaker 1: commodity you commodity perspective. Jane with this with g q 523 00:28:25,920 --> 00:28:31,119 Speaker 1: G partners are alternative investments, hedge funds, long short, black 524 00:28:31,200 --> 00:28:35,160 Speaker 1: box quants, global macro. Are they in the emerging markets 525 00:28:35,640 --> 00:28:37,560 Speaker 1: or is it just too diffuse from them? Where they've 526 00:28:37,560 --> 00:28:39,800 Speaker 1: got to go play in other places. No, I think 527 00:28:39,840 --> 00:28:41,800 Speaker 1: it depends on market to market. So if you look 528 00:28:41,840 --> 00:28:43,680 Speaker 1: at Hong Kong, for example, of a lot of the 529 00:28:43,760 --> 00:28:46,160 Speaker 1: Chinese equities trade, it is it has much more impact, 530 00:28:46,800 --> 00:28:48,400 Speaker 1: But a lot of the other markets the impact is 531 00:28:48,440 --> 00:28:51,720 Speaker 1: a lot less. So it is not as pervasive as 532 00:28:51,760 --> 00:28:57,000 Speaker 1: it is probably in the US. M So, so if 533 00:28:57,000 --> 00:28:59,680 Speaker 1: we're if you're looking at some of these frontier markets, 534 00:29:00,200 --> 00:29:04,120 Speaker 1: frontier countries, what's the next part of the world that's 535 00:29:04,160 --> 00:29:08,000 Speaker 1: gonna move from really the wild west, the frontier into 536 00:29:08,600 --> 00:29:13,280 Speaker 1: a more developed emerging market country. Yeah. So I'm kind 537 00:29:13,280 --> 00:29:15,760 Speaker 1: of a skeptical guy. So I think if I think 538 00:29:15,760 --> 00:29:18,720 Speaker 1: most of the emerging markets would not emerge, they're not emerging. 539 00:29:18,800 --> 00:29:21,280 Speaker 1: What about not emerging? But however, you get these cycles, 540 00:29:21,320 --> 00:29:23,400 Speaker 1: right Argentina, don't I don't know how many times if 541 00:29:23,400 --> 00:29:25,160 Speaker 1: there has emerged and then went back and one of 542 00:29:25,200 --> 00:29:28,080 Speaker 1: the one of the more developed countries nineties right. Uh, 543 00:29:28,360 --> 00:29:30,440 Speaker 1: it's actually as developed as US into the per capita 544 00:29:30,480 --> 00:29:32,920 Speaker 1: income and went into verse for a long time. So 545 00:29:32,960 --> 00:29:35,920 Speaker 1: it's coming out of you know, basically hibernation of sixteen 546 00:29:35,960 --> 00:29:38,680 Speaker 1: seventeen years. So you go through these cycles. Hard to predict, 547 00:29:39,520 --> 00:29:41,840 Speaker 1: but he's gonna have a secular long term ran. What 548 00:29:41,920 --> 00:29:46,280 Speaker 1: about Africa, which is perennially on the verge of seeing 549 00:29:46,360 --> 00:29:50,200 Speaker 1: some progress and then the same thing they sort of 550 00:29:50,200 --> 00:29:54,160 Speaker 1: fall back. Are we gonna see any of these countries modernize, 551 00:29:54,240 --> 00:29:57,280 Speaker 1: become a more significant economy anytime soon? Yeah? I think, 552 00:29:57,320 --> 00:29:59,040 Speaker 1: I think. I think on a longer term basis, yes, 553 00:29:59,080 --> 00:30:01,240 Speaker 1: because if you look at the child mortality and those 554 00:30:01,320 --> 00:30:04,640 Speaker 1: kind of statistics, they have improved dramatically. So I'm pretty 555 00:30:04,680 --> 00:30:07,200 Speaker 1: upbeat on a very long term basis on those areas. Rogie, 556 00:30:07,200 --> 00:30:08,840 Speaker 1: thank you so much, Roggie Chaine with us with g 557 00:30:08,960 --> 00:30:11,320 Speaker 1: q G, please come back. We'd love to have you back. 558 00:30:11,360 --> 00:30:13,840 Speaker 1: In particularly, you know Emergie markets, Barre, they've just spung 559 00:30:13,920 --> 00:30:16,040 Speaker 1: to life over the last twelve months. Well, you know, 560 00:30:16,120 --> 00:30:19,040 Speaker 1: you go through these long cycles where the US outperforms 561 00:30:19,040 --> 00:30:23,040 Speaker 1: emerging markets for eight and twelve years, and in fact, 562 00:30:23,120 --> 00:30:25,360 Speaker 1: if you look at the games in the US emerging market, 563 00:30:25,680 --> 00:30:28,000 Speaker 1: the gap between the two is as big as it's 564 00:30:28,040 --> 00:30:31,040 Speaker 1: gotten in forever. How come when Pharaoh shows up, he 565 00:30:31,080 --> 00:30:33,840 Speaker 1: gets all the love and emails and tweets, and you know, 566 00:30:33,880 --> 00:30:36,040 Speaker 1: we got nothing. I don't know. I can't answer that. 567 00:30:36,800 --> 00:30:41,360 Speaker 1: Thank thank you Italian World Cup wisdom. It was just 568 00:30:41,880 --> 00:30:59,320 Speaker 1: hugely popular. Right now, the voice of William Blair an 569 00:30:59,400 --> 00:31:01,680 Speaker 1: industrial We do want to get to industrials and not 570 00:31:01,840 --> 00:31:08,200 Speaker 1: just look at generous electric is Nick Cayman joins us. Now, Nick, 571 00:31:08,560 --> 00:31:11,120 Speaker 1: I think everybody knows the story of g g E 572 00:31:11,360 --> 00:31:17,000 Speaker 1: and the tobacco down organic revenue growth forward. Can they 573 00:31:17,280 --> 00:31:23,240 Speaker 1: surprise or is it going to be single digit mediocrity? Well, 574 00:31:23,240 --> 00:31:26,200 Speaker 1: that's gonna be a key requirement of the new team. 575 00:31:26,280 --> 00:31:28,840 Speaker 1: You know, we do have certainly probably one of the 576 00:31:28,880 --> 00:31:32,760 Speaker 1: best global growth GDP outlooks for two thousand eighteen, since 577 00:31:32,840 --> 00:31:36,280 Speaker 1: two thousand twelve or maybe in six and capital spending 578 00:31:36,440 --> 00:31:40,520 Speaker 1: has come roaring back, and so you gotta make sure 579 00:31:40,560 --> 00:31:44,160 Speaker 1: you got the sales to to lift and benefit from 580 00:31:44,200 --> 00:31:49,160 Speaker 1: that away from aviation. Is there an overcapacity worldwide in 581 00:31:49,240 --> 00:31:52,520 Speaker 1: the remaining divisions they have? Is it just there's too 582 00:31:52,600 --> 00:31:56,800 Speaker 1: much power stuff chasing after whatever the available market is. 583 00:31:58,000 --> 00:32:00,640 Speaker 1: The power stuff is an issue, as are all ates 584 00:32:00,680 --> 00:32:04,240 Speaker 1: to both the shift to renewables and then geographically the 585 00:32:04,280 --> 00:32:08,160 Speaker 1: shift from developed to emerging and non developed countries. And 586 00:32:08,280 --> 00:32:10,760 Speaker 1: I think this was exacerbated by the fact that there 587 00:32:10,840 --> 00:32:14,960 Speaker 1: was an egregious pull forward of advanced gas path and 588 00:32:15,080 --> 00:32:21,800 Speaker 1: other aftermarket service UM sales in the last eighteen months, 589 00:32:21,920 --> 00:32:25,400 Speaker 1: and so that in turn is a key part of 590 00:32:25,520 --> 00:32:29,200 Speaker 1: why you now have to suddenly catch up on a 591 00:32:29,280 --> 00:32:34,120 Speaker 1: restructuring to reduce capacity. Demand peaked in sixteen and it 592 00:32:34,200 --> 00:32:38,040 Speaker 1: was expected to UH to begin to improve in nineteen, 593 00:32:38,240 --> 00:32:42,040 Speaker 1: but that is not the expectation now. So so hey, 594 00:32:42,040 --> 00:32:45,200 Speaker 1: this is battery results. How much of these changes that 595 00:32:45,240 --> 00:32:51,120 Speaker 1: we're seeing in both the GE revenue distribution and and 596 00:32:51,160 --> 00:32:55,480 Speaker 1: their business focus is not unique to G but we're 597 00:32:55,480 --> 00:33:00,280 Speaker 1: going to see other large industrials have to back to 598 00:33:00,400 --> 00:33:04,600 Speaker 1: the is this the modern world, the changing economy, the 599 00:33:04,640 --> 00:33:07,960 Speaker 1: digital world? What are the factors for GE that are 600 00:33:08,000 --> 00:33:12,920 Speaker 1: consistent across the entire sector and not unique to to 601 00:33:13,200 --> 00:33:17,200 Speaker 1: General Electric. That's a really good question, and we actually 602 00:33:17,200 --> 00:33:19,080 Speaker 1: said I'm talked about that for an hour this morning 603 00:33:19,080 --> 00:33:23,000 Speaker 1: and our industrial team and UM I think that one 604 00:33:23,000 --> 00:33:26,520 Speaker 1: of the things that came out yesterday is that GE 605 00:33:26,560 --> 00:33:29,080 Speaker 1: is stepping back from the oil and gas business and 606 00:33:29,120 --> 00:33:32,880 Speaker 1: ostensibly from transportation at some point in the future because 607 00:33:33,000 --> 00:33:37,560 Speaker 1: of their inherent underlying psychicality, and that that in turn 608 00:33:37,680 --> 00:33:40,400 Speaker 1: makes it hard no matter how well you worked to 609 00:33:40,560 --> 00:33:44,160 Speaker 1: run and plan and develop new products and services, and 610 00:33:44,560 --> 00:33:47,480 Speaker 1: analytics for business makes it hard to be able to 611 00:33:47,600 --> 00:33:52,680 Speaker 1: take and offset that cylicality and generate consistent above average returns. 612 00:33:52,800 --> 00:33:55,640 Speaker 1: But isn't that the nature of the economy that some 613 00:33:55,800 --> 00:33:59,040 Speaker 1: sectors are going to be consistent. In some sectors, I'm 614 00:33:59,040 --> 00:34:01,360 Speaker 1: gonna be cyclical. Why why would you want to move 615 00:34:01,400 --> 00:34:07,520 Speaker 1: away from a a strong sector that is occasionally cyclical 616 00:34:07,960 --> 00:34:10,759 Speaker 1: if there are profits to be had there now, I 617 00:34:10,760 --> 00:34:13,080 Speaker 1: mean quite honestly, that's why we put together things called 618 00:34:13,120 --> 00:34:17,200 Speaker 1: conglomerates or diversified industrials so that they quote unquote offset 619 00:34:17,239 --> 00:34:20,520 Speaker 1: those But I think that you know, it's pretty clear 620 00:34:20,520 --> 00:34:24,040 Speaker 1: if you invest at least at dispoint, you still make 621 00:34:24,080 --> 00:34:27,279 Speaker 1: great profits in aviation unless you know the trans atmospheric 622 00:34:27,760 --> 00:34:31,080 Speaker 1: rocket tear from Elon Musk is going to take off 623 00:34:31,120 --> 00:34:35,359 Speaker 1: tomorrow morning. But no in the In the transportation stye, 624 00:34:35,360 --> 00:34:37,200 Speaker 1: we spent a lot of time focusing on rail and 625 00:34:37,280 --> 00:34:40,680 Speaker 1: it's a great market, but it's a great market supplying 626 00:34:40,880 --> 00:34:45,759 Speaker 1: perhaps safety equipment as opposed to big iron, and in 627 00:34:45,840 --> 00:34:50,000 Speaker 1: turn big iron carries with it big fixed cost and 628 00:34:50,080 --> 00:34:54,200 Speaker 1: so they have been extremely successful at predictive analytics for 629 00:34:54,280 --> 00:34:59,000 Speaker 1: the sixth Class one rails here in North America. But 630 00:34:59,239 --> 00:35:02,000 Speaker 1: still even know that fifteen percent of sales here in 631 00:35:02,080 --> 00:35:06,480 Speaker 1: seventeen earnings, they still are looking, I think to make 632 00:35:06,520 --> 00:35:10,759 Speaker 1: sure they have the electrified okay version of how to 633 00:35:10,800 --> 00:35:13,480 Speaker 1: move people. Nick came in with us is William Blair. 634 00:35:13,520 --> 00:35:16,359 Speaker 1: As we tear apart, Nick, they've got to sell these 635 00:35:16,400 --> 00:35:21,640 Speaker 1: companies that they're jettisoning to somebody else under highly visible 636 00:35:21,719 --> 00:35:27,080 Speaker 1: and bright lights. What is your experience of forget about 637 00:35:27,200 --> 00:35:30,080 Speaker 1: g E. Somebody's got to be dumb enough to buy 638 00:35:30,120 --> 00:35:34,680 Speaker 1: this stuff. Who are those guys? Yeah, it's a very 639 00:35:34,680 --> 00:35:36,920 Speaker 1: good question. I don't right now I would be scratched. 640 00:35:36,960 --> 00:35:39,720 Speaker 1: My who wants to buy current you know, the next 641 00:35:40,160 --> 00:35:44,760 Speaker 1: you know kind of um sensor laden you know, led 642 00:35:44,880 --> 00:35:51,240 Speaker 1: commercial lighting is an example. Yeah, I mean what's the price? 643 00:35:51,360 --> 00:35:56,200 Speaker 1: Who are these people? Um? It'll be very interesting to see, 644 00:35:56,680 --> 00:35:59,560 Speaker 1: you know, whether or not needed on these cot next 645 00:35:59,719 --> 00:36:03,960 Speaker 1: JE narration businesses that Jeff and Beth Combstock put together 646 00:36:04,400 --> 00:36:07,239 Speaker 1: are actually assailable. I would tell you. For instance, still 647 00:36:07,280 --> 00:36:10,560 Speaker 1: there are some assets like the joint venture to develop 648 00:36:10,600 --> 00:36:16,279 Speaker 1: the integrated ivionic suite for the Comax C Okay that 649 00:36:16,680 --> 00:36:20,360 Speaker 1: has with avic that, um, that could be extremely valuable 650 00:36:20,400 --> 00:36:22,560 Speaker 1: Boeing who wants to get in the avax business but 651 00:36:22,680 --> 00:36:28,160 Speaker 1: can't possibly buy Rockwell Collins. So there's things like that 652 00:36:28,160 --> 00:36:30,760 Speaker 1: that you could pull out of a hat which only 653 00:36:30,920 --> 00:36:35,440 Speaker 1: drain cash, burn up working capital, and have horrible return, 654 00:36:35,520 --> 00:36:38,279 Speaker 1: you know. And I asked Jeff today, John, what is 655 00:36:38,320 --> 00:36:41,960 Speaker 1: the net collective free cash from all the assets you're 656 00:36:42,000 --> 00:36:45,600 Speaker 1: thinking about selling? And he said virtually none. Really, this 657 00:36:45,680 --> 00:36:47,840 Speaker 1: is a huge deal. You got to move this stuff. 658 00:36:47,920 --> 00:36:52,919 Speaker 1: So so how significant are the regulators and the antitrust 659 00:36:53,000 --> 00:36:58,080 Speaker 1: rules on narrowing the list of potential buyers for these 660 00:36:58,160 --> 00:37:04,640 Speaker 1: different divisions? With the Boeing avionics segment actually fly, um 661 00:37:05,040 --> 00:37:07,239 Speaker 1: oh yeah, I mean I mean that it doesn't even 662 00:37:07,239 --> 00:37:10,359 Speaker 1: in its commercial service right, So it's it's the it's 663 00:37:10,400 --> 00:37:14,880 Speaker 1: the avionics suite for the next largest market for the 664 00:37:14,880 --> 00:37:17,640 Speaker 1: next twenty years for commercial aviation, which hasn't even hatched. 665 00:37:18,560 --> 00:37:21,640 Speaker 1: And there's no problem with it essentially being Bowling and 666 00:37:21,719 --> 00:37:26,600 Speaker 1: Bombardier and Airbus and no, no no, no, there's nobody selling 667 00:37:26,719 --> 00:37:31,759 Speaker 1: anything into the Chinese you know domain. Uh, you know, 668 00:37:31,800 --> 00:37:35,040 Speaker 1: aircraft manufactured COMAC. So if if if Boeing were to 669 00:37:35,160 --> 00:37:39,239 Speaker 1: buy uh you know Rockwell Collins, all the Rockwell common 670 00:37:39,280 --> 00:37:42,080 Speaker 1: avionics that go into you know, competitors of Boeing planes 671 00:37:42,120 --> 00:37:45,560 Speaker 1: would suddenly no longer you know, they finding all there. 672 00:37:45,680 --> 00:37:49,200 Speaker 1: So this is this is a very unique kind of 673 00:37:49,280 --> 00:37:52,680 Speaker 1: situation as you look across the different types of businesses, 674 00:37:52,719 --> 00:37:55,520 Speaker 1: because transportation, I think is a merger maybe with a 675 00:37:55,600 --> 00:37:59,719 Speaker 1: Bombardi Transport, so you have then a complete suite of 676 00:38:00,360 --> 00:38:03,719 Speaker 1: transit or passenger as well as freight and a much 677 00:38:03,760 --> 00:38:08,279 Speaker 1: more global okay, and all the different types of you know, uh, 678 00:38:08,400 --> 00:38:12,080 Speaker 1: propulsion systems, fossil or the hot diesel electric or like that. 679 00:38:12,360 --> 00:38:14,239 Speaker 1: This is I mean, they ran right into that bus 680 00:38:14,239 --> 00:38:17,040 Speaker 1: sell in India, Nick, ten seconds by hold cell on 681 00:38:17,120 --> 00:38:20,239 Speaker 1: g E twelve months out. Where are you right now? 682 00:38:20,440 --> 00:38:22,799 Speaker 1: We're we're a buy and we think that as you 683 00:38:22,960 --> 00:38:26,239 Speaker 1: unlock you know, the value from these assets sales, it's 684 00:38:26,280 --> 00:38:30,160 Speaker 1: probably gonna be more disposable cash than the combined free 685 00:38:30,200 --> 00:38:34,520 Speaker 1: cash flow of sixteen or seventeen billion in eighteen and nineteen. 686 00:38:34,920 --> 00:38:37,600 Speaker 1: Very good. Nick came in, Thank you so much, greatly appreciated, 687 00:38:37,600 --> 00:38:40,600 Speaker 1: Total class actor. Come on, Nick came in with William Blair, 688 00:38:49,800 --> 00:38:53,960 Speaker 1: Thanks for listening to the Bloomberg Savannas Podcast. Subscribe and 689 00:38:54,040 --> 00:38:59,360 Speaker 1: listen to interviews on Apple Podcasts, SoundCloud, or whichever podcast 690 00:38:59,440 --> 00:39:03,560 Speaker 1: platform you prefer. I'm on Twitter at Tom Keene David Gura. 691 00:39:03,880 --> 00:39:07,560 Speaker 1: Is that David Gura? Before the podcast? You can always 692 00:39:07,640 --> 00:39:10,360 Speaker 1: catch US World one. I'm Bloomberg Radio