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Speaker 1: Brought you by Bank of America Mary Lynch. Investing in

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Speaker 1: local communities, economies and a sustainable future. That's the power

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Speaker 1: of global connections, Mary Lynch, Pierce Fenner, and Smith Incorporated

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Speaker 1: member s I p C. Welcome to the Bloomberg Surveillance Podcast.

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Speaker 1: I'm Tom Keene with David Gura. Daily we bring you

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Speaker 1: insight from the best in economics, finance, investment, and international relations.

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Speaker 1: Find Bloomberg Surveillance on iTunes, SoundCloud, Bloomberg dot Com, and

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Speaker 1: of course on the Bloomberg Ellen Ellen's here with us now.

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Speaker 1: She's the chief US economist at Morgan Stanley Ellen. I

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Speaker 1: was reminded of what happened about a month ago. There

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Speaker 1: was a flurry of emails among teams surveillance. Ellen Sentner

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Speaker 1: changes her call now says there's gonna be a March

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Speaker 1: FED move something like that. Help us process what we

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Speaker 1: got from the Fed today, the minute this week rather

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Speaker 1: the minutes from from that that f O m C.

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Speaker 1: I mean, what does it tell you about the path forward? Well,

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Speaker 1: I think there was a lot of focus from investors

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Speaker 1: on what would the Fed uh say about its balance sheet?

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Speaker 1: What did the FED say about its balance sheet at

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Speaker 1: that March f O m C meeting UM, and I

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Speaker 1: think what we're starting to see is a some miscommunication

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Speaker 1: or communication problems that will probably plague the FED this

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Speaker 1: year around. How should investors think about when the time comes,

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Speaker 1: which we've been told at the end of this year,

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Speaker 1: the time would likely come to draw down the balance sheet,

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Speaker 1: that massive four and a half trillion dollar or fourth

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Speaker 1: point two trillion dollar balance sheet that the FED has,

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Speaker 1: they need to reduce that. But how should investors think

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Speaker 1: about that visa VI the number of rate hikes? Will

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Speaker 1: the balance sheet uh draw down uh be in lieu

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Speaker 1: of rate high or will it be in tandem with

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Speaker 1: rate hikes? And the FED has not made that decision yet,

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Speaker 1: but markets traded as though the FED had made the

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Speaker 1: decision that they would just simply stop raising rates when

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Speaker 1: they start drawing down the balance sheet later this year.

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Speaker 1: And that is certainly not the message the FED wanted

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Speaker 1: to send. Does Let's get back to the comments that

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Speaker 1: Bill Dudley made in his interview with with Michael McKee

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Speaker 1: about about the sort of effective of of drawing down

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Speaker 1: the balance what that would mean kind of uh in

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Speaker 1: light of what how that sort of similar to raising rates? Yeah,

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Speaker 1: well absolutely. You got Dudley on one side, which which

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Speaker 1: who has implied that balance sheet draw down would be

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Speaker 1: in lieu of rate hikes uh, in fact talking about

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Speaker 1: maybe taking a little pause in the rate hikes cycle

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Speaker 1: when they start drawing down the balance sheet. On the

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Speaker 1: other side of it, you have Cherry Yelling, who has

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Speaker 1: said they're complementary uh and would be used in tandem. UH.

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Speaker 1: And So what I think markets missed about the March

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Speaker 1: meeting is that the three rate hikes that the FED

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Speaker 1: and visions for next year included balance sheet assumptions in

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Speaker 1: there that they don't have to go more quickly than

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Speaker 1: that because you are also drawing down the balance sheet.

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Speaker 1: What do these FED hikes mean for jobs? What do

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Speaker 1: they mean for the vector the first second derivatives of

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Speaker 1: job formation? I mean, do they three rate hikes? Does

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Speaker 1: that even begin to impinge on plans of job formation?

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Speaker 1: I don't think so. Well. The purpose of of hiking rates,

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Speaker 1: as you high rates to tighten financial conditions, we certainly

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Speaker 1: haven't haven't seen any tightening of financial conditions, and the

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Speaker 1: FED seems to be okay with that. You tighten financial

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Speaker 1: conditions because you raise the cost of credit you raise

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Speaker 1: the cost of funding payrolls and the economy slows. We

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Speaker 1: have not seen any effect of that, and I don't

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Speaker 1: think that they we will until we get a much

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Speaker 1: higher federal funds rate. What we have seen is consumers

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Speaker 1: borrowing in advance of higher interest rates. So that's been

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Speaker 1: the number one answer on these consumer surveys of why

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Speaker 1: do you think now is a good time to buy

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Speaker 1: a home, a car, other big durables, And so that's

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Speaker 1: created a lot of anticipatory activity because we think the

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Speaker 1: Fed's gonna raise rates and rates are gonna be higher,

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Speaker 1: so you want to buy today? Seconds all we got.

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Speaker 1: We're gonna come back with that one. What about auto sales?

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Speaker 1: I mean, what was the Morgan Stanley sift on auto sales?

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Speaker 1: So auto sales surged in December to an incredible high,

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Speaker 1: and what we saw was that was really households responding

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Speaker 1: to the prospects of of tax cuts, also the higher

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Speaker 1: interest rates coming, so I want to buy now. Having

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Speaker 1: surged at the end of last year, though, we've seen

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Speaker 1: some softness coming into this year and that is a

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Speaker 1: big headwind for consumer spending in the first quarter. But

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Speaker 1: the rise uh that we we talked about just earlier

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Speaker 1: on Bloomberg TV. In in auto delinquencies in the subprime space.

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Speaker 1: It is such a small segment of the market, it's

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Speaker 1: not uncommon late in a business cycle to start to

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Speaker 1: get a rise in delinquencies in that space. And I'm

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Speaker 1: not worried that we're going to see some choking off

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Speaker 1: kill level of auto sales. We're creating jobs. People have

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Speaker 1: to commute people by car. Okay, Ellen center with us,

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Speaker 1: and we'll continue on job j Help me here with

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Speaker 1: the number one male item I get on the job's report.

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Speaker 1: Fancy people like you say wages are increasing. There's not

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Speaker 1: a single listener who agrees. They take out this inflation item,

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Speaker 1: that inflation item, and they would suggest as a general statement,

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Speaker 1: wages are flat. If we get the higher inflation chair Yellings,

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Speaker 1: speaking of do we get even more depressed real wages, well,

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Speaker 1: they we should be getting a continued strengthening the labor

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Speaker 1: market alongside that. I mean, the FED is focused on

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Speaker 1: core inflation in the U S so stripping out energy

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Speaker 1: and food, which of course are very important things that

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Speaker 1: the consumer UH purchases um but core inflation will be

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Speaker 1: moving through the FEDS two percent goal later this year,

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Speaker 1: and that is going to keep the FED on a

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Speaker 1: gradual track. I don't think it speeds up the rate hikes. Uh. Well.

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Speaker 1: Alongside that is a very very easy set the financial

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Speaker 1: conditions in the economy and jobs that are growing and

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Speaker 1: continue to grow more strongly. And what I'm encouraged about

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Speaker 1: is that the job growth that we've seen, especially since

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Speaker 1: the election, is coming from small business. We're seeing business

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Speaker 1: formations pick up and business small businesses increased hiring, so

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Speaker 1: wages are going to continue to grow and strengthen. What

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Speaker 1: we need with that small business entrepreneurial spirit coming back

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Speaker 1: is that wages will start spilling over into middle income

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Speaker 1: and high paying industries, which is where wage growth more

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Speaker 1: broadly picks up more rapidly. What we've seen is a

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Speaker 1: very weak, slow blead upward in wage growth. It has

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Speaker 1: been accelerating, but at a very slow acceleration. That will

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Speaker 1: strengthen as we create more jobs with wage gains to

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Speaker 1: spill over into middle and high paying industries. That is

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Speaker 1: the key. You've highlighted the fact that small businesses and

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Speaker 1: medium sized businesses are hiring, the big ones are not.

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Speaker 1: What's up with that? Why is that the case? Well,

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Speaker 1: I think if you if you look at what's happened

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Speaker 1: since the election, there's been no more clarity uh of

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Speaker 1: uh the business environment, operating environment for multinationals. You know,

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Speaker 1: have we lowered the hurdle rate for investment? Uh? And no,

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Speaker 1: we have no clear picture on corporate tax reform yet.

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Speaker 1: And while capex plans, so capital expenditures plans have risen,

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Speaker 1: those large businesses are telling us that they don't know

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Speaker 1: if those plans will come through because we need some

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Speaker 1: clarity around corporate tax reform. If you're a small and

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Speaker 1: medium sized business in the US, you care not about that. Uh.

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Speaker 1: You've got consumers out there, uh spending more. Consumer confidence

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Speaker 1: is high, you might get some amazing on the regulatory front. Uh.

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Speaker 1: And so we've seen small and medium businesses respond to that,

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Speaker 1: where you know, any kind of lower corporate tax rate

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Speaker 1: later this year is good for them. Uh. And so

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Speaker 1: it's really been a boon for domestic activity. UH. And

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Speaker 1: that's what we're seeing small businesses respond to, and that's

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Speaker 1: where the job growth is coming from. There was a

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Speaker 1: spicy moment in the last f o MC press conference

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Speaker 1: at Jennet Yellen talking about GDP referring to it as

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Speaker 1: a pretty noisy indicator. How do you janet and spicy?

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Speaker 1: It's all relative the context of it's spicy for economists,

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Speaker 1: let's saycause we have a low bar for what we

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Speaker 1: think is spicy. But yeah, she's absolutely right, and what

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Speaker 1: they're doing is heading off any concern over what Tom

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Speaker 1: and I talked about earlier with the optics of first

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Speaker 1: quarter GDP. When we get that print later this month,

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Speaker 1: it's gonna look pretty darn week and that might raise

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Speaker 1: some eyebrows, But the second quarter is already set for

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Speaker 1: a pretty nice rebound three plus in Q two. So

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Speaker 1: that if again, if you're a good economist and you

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Speaker 1: average across the first half of the year, it tells

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Speaker 1: us that we're pretty much still tracking right in the

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Speaker 1: pocket of the feds outlook around two and let me

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Speaker 1: give you a curveball question before Tom, thank you all

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Speaker 1: the rage now sanctuary cities. I saw a sign on

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Speaker 1: Twitter Malibu and outside l A is making a joke

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Speaker 1: about being a Saint we city. Are people still migrating

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Speaker 1: to the cities? Is there is? Bernard bayle In the

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Speaker 1: great historian would say a d peopling of North America.

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Speaker 1: Are people migrating to the city. Well, I think it's

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Speaker 1: it's largely driven by demographics, um, and the millennials have

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Speaker 1: been a big driver of that, the urbanization and people

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Speaker 1: moving towards the cities and not having to own vehicles. Uh,

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Speaker 1: and to stay more mobile, if you will. And I

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Speaker 1: can only see that continuing because you look at gen Z,

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Speaker 1: which are not quite an adult population yet, but they're large.

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Speaker 1: I don't know what we could act after Z. Yes, no,

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Speaker 1: generation center is too old for that. Let me tell

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Speaker 1: you tom uh No, but gen Z is the name

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Speaker 1: we've given the generation coming after the millennials, and the

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Speaker 1: leading edge of them are just now around the age

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Speaker 1: of eighteen, so they aren't quite an adult population yet,

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Speaker 1: but they're even larger than the millennials. And to the

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Speaker 1: extent that they may continue that trend of urbanization of

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Speaker 1: wanting to be mobile and being connected to their smartphone

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Speaker 1: so to speak. Uh, you know, we might see a

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Speaker 1: continuation in this demographic. How young is gen Z? How

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Speaker 1: low did they go in age? Well, they they their

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Speaker 1: their birth to eighteen. So the leading edge let me

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Speaker 1: let me brief weekend, there's gen Z and after that

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Speaker 1: Generation slime. Okay, if You're right, your your generation is

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Speaker 1: are are not an economic agent for the economy. But

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Speaker 1: that's what we care about. When they move beyond eighteen

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Speaker 1: and become economic, they become more expensive. Tom. Tom is

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Speaker 1: a little dismal this morning. Yeah, Jen More expences, the

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Speaker 1: gen Z took me to victorious secret. Oh did they

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Speaker 1: dropped a hundred and seventy five bucks? You sat in

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Speaker 1: the lobby reading outside on a bench. I comes out with,

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Speaker 1: you've better been on a bench outside. Believe me, they're

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Speaker 1: spending a very good John Tucker weighing in, it was

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Speaker 1: Ellen Santner is our gen Z and we are thrilled

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Speaker 1: that she gives us perspective. From Morgan Stanley, this is

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Speaker 1: an important conversation. Now, are John Farrell with the president

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Speaker 1: of the Minneapolis Fellow Reserve, Neil Cash Curry lending and

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Speaker 1: that relaxing them could spur economic growth. Minneapolis Federal Reserve

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Speaker 1: President Neil Cash Gary responded saying those assertions are demonstrably false.

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Speaker 1: Joining us now is Neil cash Gary, Minneapolis Federal Reserve President,

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Speaker 1: Neil great to have you with us on a program.

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Speaker 1: I'll just begin with a simple question, what is the

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Speaker 1: objective of taking on a Wall Street chief executive so

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Speaker 1: publicly like you have in the last twenty four hours. Well,

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Speaker 1: our job is to call out risks where we see

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Speaker 1: them and to propose solutions. And when a Wall Street leader,

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Speaker 1: and I know Jamie Diamond, and I like him and

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Speaker 1: I respect him, when he says things that I believe

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Speaker 1: are incorrect, I think it's my responsibility and our responsibility

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Speaker 1: to speak out. The fact is too big to Fail

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Speaker 1: has not been solved. The biggest banks are still too

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Speaker 1: big to fail. The American people and Congress need to

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Speaker 1: know that, and we have offered them potential solutions in

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Speaker 1: the form of substantially higher capital requirements. Now there is

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Speaker 1: a narrative of building up around you, and be interested

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Speaker 1: to get your response to it that Neil Cascari's looking

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Speaker 1: for some publicity to wilify himself, to get a most

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Speaker 1: senior role on the f O m C. What do

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Speaker 1: you sight back to the people they're saying that, Neil, Well,

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Speaker 1: you know, when somebody can't argue with me on the

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Speaker 1: substance or the facts or the analysis, they're left with

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Speaker 1: trying to criticize the messenger, and so to me, I

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Speaker 1: interpret that as a white flag of surrender. I'll take

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Speaker 1: that criticism all day long. That means they can't argue

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Speaker 1: with the analysis. The analysis stands on its face. So so, Neil,

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Speaker 1: this is not the first time you've raised the question

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Speaker 1: of too big to fail and your concerns about this.

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Speaker 1: This goes back now a couple of years or so.

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Speaker 1: So it's not a secret how many people who are

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Speaker 1: federal reserve governors or presidents agree with you. Do other

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Speaker 1: people defend share your view? You know several do Several

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Speaker 1: have reached out to me and said thank you for

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Speaker 1: continuing to beat this drum, to continue to raise this issue.

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Speaker 1: And you know, my hope is that if we keep

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Speaker 1: talking about it, we keep pointing out the facts showing

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Speaker 1: where other folks are wrong who are saying that we've

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Speaker 1: solved this, that we will motivate people. I'm I like

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Speaker 1: the fact that there's some UH news stories coming out

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Speaker 1: of the administration saying that they're looking at financial reforms

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Speaker 1: to try to address too big to fail. I think

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Speaker 1: we need to all keep pushing in the same direction,

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Speaker 1: put out options, and let the American people decide do

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Speaker 1: they want to live with the financial system where the

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Speaker 1: biggest banks are supported by taxpayers implicitly or explicitly, or

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Speaker 1: do we want a more rational system where the taxpayers

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Speaker 1: are not on the hook? I want the ladder. I

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Speaker 1: think most people do. It's our job to give them

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Speaker 1: the facts and the information so they can make that decision. So,

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Speaker 1: Neil fit is the responsibility of Federal Reserve leadership to

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Speaker 1: call out risks where it should where they exist, as

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Speaker 1: you said, and if other members of the leadership feel

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Speaker 1: the way you do, why are we not hearing from them? Well,

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Speaker 1: each person should make their own call on what they're comfortable,

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Speaker 1: you know, taking on. We have a lot of issues

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Speaker 1: to deal with. Obviously, monetary policy is our core mandate

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Speaker 1: and I'm outspoken on monetary policy too at the right times.

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Speaker 1: So I'll leave it to my colleagues to decide where

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Speaker 1: they want it, which battles they want to pick. But

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Speaker 1: this is one that the other thing is Remember I'm

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Speaker 1: one of the only people. Bill Dudley and I are

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Speaker 1: the only two people sitting on the f o MC

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Speaker 1: today who were literally in the middle of the financial

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Speaker 1: crisis in two thousand eight, and so this has burned

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Speaker 1: into me how hard it was to arrest the dominoes

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Speaker 1: from falling from one big bank to the next big

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Speaker 1: bag to the next big bank. And so maybe that's

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Speaker 1: why I take this, uh put this at the forefront

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Speaker 1: of the issues that I'm focused on because I was

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Speaker 1: one of the first responders actually trying to arrest the crisis.

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Speaker 1: And of course front and center now is glass Eagle.

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Speaker 1: Is there any good in the idea of separating the

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Speaker 1: commercial and investment banking unit? What does that do? You know?

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Speaker 1: I'm not sure that it does a lot. To be

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Speaker 1: honest with you, I'm not opposed to it, but it

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Speaker 1: by itself it doesn't address too big to fail. Remember,

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Speaker 1: in two thousand and eight, we had pure play investment

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Speaker 1: banks like Lehman Brothers and bear Stearns run into trouble

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Speaker 1: and post systemic risk for the economy, and we had

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Speaker 1: some pure play commercial banks do the same thing. So

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Speaker 1: it wasn't simply the combination of these two activities that

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Speaker 1: created the risk. So to me, the most important thing

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Speaker 1: we can do, whether it's an investment bank or commercial

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Speaker 1: bank or a combination, is substantially increase the capital requirements

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Speaker 1: of the biggest institutions. That's the buffer that protects them

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Speaker 1: and protects the taxpayers. If they make a mistake. If

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Speaker 1: beyond that we also want to separate the activities, I'm

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Speaker 1: not opposed to it, but the separation of the two

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Speaker 1: by itself is not going to address too big to fail.

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Speaker 1: All right, you've got to get to FED policy. Now,

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Speaker 1: can you hike and normalize at the same time? You

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Speaker 1: in terms of the balance sheet? Well, my preference is

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Speaker 1: that we put out a detailed plan on exactly how

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Speaker 1: and when we're going to normalize the balance sheet? But

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Speaker 1: do people agree with you to that? Because it's been

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Speaker 1: a lot of conflicting views, deadly seems think we have

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Speaker 1: to take a pause in rates. You obviously advocated a

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Speaker 1: balance sheet and before we do any more rate hikes.

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Speaker 1: What's the more of the consensus in the FED? It

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Speaker 1: really wasn't clear in the minutes. Well, I think there's

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Speaker 1: a wide range of views, and I think the minutes

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Speaker 1: reflected the fact that people are still thinking through a

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Speaker 1: wide range of options. And who knows. As we have

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Speaker 1: further deliberations, perhaps my colleagues will convince me that what

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Speaker 1: I've articulated so far may not be optimal. We'll see.

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Speaker 1: We want to look at the data and the analysis.

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Speaker 1: But to me, I'm focusing on the Job's report today

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Speaker 1: is very important. I want to see if the unemployment

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Speaker 1: rate stays around four point seven or if it starts

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Speaker 1: to drop. I'm trying to get signals of whether or

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Speaker 1: not this labor force participation story of Americans re entering

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Speaker 1: the labor force, is that going to continue. I hope

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Speaker 1: it does. At some point it's going to run out,

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Speaker 1: and so I'm looking for signs on when that process

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Speaker 1: is going to run out. That's going to be an

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Speaker 1: important indicator for when I think it's gonna be time

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Speaker 1: to normalize policy, whether it's by increasing the federal fund

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Speaker 1: rate or it's by shrinking the balance sheet. Well, just

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Speaker 1: quickly on the payrolls report one eight is the major

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Speaker 1: estimate here at Bloomberg. If we carry on print se

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Speaker 1: one eight, two hundred suits wincy. What does that's? How

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Speaker 1: you about lago market slack? Uh? It tells me. It

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Speaker 1: doesn't tell me a lot by itself, because you need

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Speaker 1: to combine that. So let's say it's two hundred, and

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Speaker 1: that's well in excess of the hundred twenty we need

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Speaker 1: to keep up with population growth. Then you have to

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Speaker 1: look at the headline unemployment rate If that headline unemployment

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Speaker 1: rate stays at four seven while we're creating jobs at

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Speaker 1: that rapid pace, that suggests that people are entering the

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Speaker 1: labor market are not leaving, and that's that's very helpful.

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Speaker 1: And so that's what we've been seeing over the last

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Speaker 1: couple of years. I hope to see that continue. But

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Speaker 1: if you if you hit two hundred and then the

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Speaker 1: headline unemployment rate is dropping, that's an indicator that maybe

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Speaker 1: we're starting to use up that slack and that it

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Speaker 1: could be closer to being time to normalize interest rates.

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Speaker 1: Very good. Neil crush Curry in conversation with Mr Farrell,

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Speaker 1: Miss Steele and Mr Weston, UH this morning, some really

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Speaker 1: interesting nuances. David Gurrett to that conversation. Uh, The idea

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Speaker 1: that that Mr Coush Curry ends alone will be interesting

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Speaker 1: to see. Yeah. I thought his response to David Weston's

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Speaker 1: question about whether or not others on the f WEMC

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Speaker 1: agree with him was interesting. He didn't name any names,

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Speaker 1: but he said that other members of the committee had

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Speaker 1: reached out to him, and again, this is a something

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Speaker 1: of profound importance to him. He's issued a big report

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Speaker 1: on on the stability of the financial system. So interesting

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Speaker 1: to hear from him this spring brought you by Bank

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Speaker 1: of America, Mary Lynch. Dedicated to bringing our clients insights

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00:18:32,760 --> 00:18:36,359
Speaker 1: and solutions to meet the challenges of a transforming world.

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00:18:36,880 --> 00:18:40,600
Speaker 1: That's the power of global connections. Mary Lynch, Pierce, Fenner

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00:18:40,680 --> 00:18:47,840
Speaker 1: and Smith Incorporated, Member s I p C. This is

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00:18:48,080 --> 00:18:51,600
Speaker 1: arguably David Gura the most important interview of the day.

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Speaker 1: Ambassador Ross is steeped and the linkage between the Eastern

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Speaker 1: Mediterranean and the Soviet Union with public service US. Back

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Speaker 1: to George Bush Senior, George Herbert Walker Bush, why don't

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Speaker 1: you bring in Ambassador Dennis Ross. He's not the William

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Speaker 1: Davidson distinguished fell at the Washington Institute for Near East Policy. Ambassadors,

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Speaker 1: let me begin with the piece that's in the New

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Speaker 1: York Times this morning by your former colleague Tony Blank

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Speaker 1: and former Deputy Secretary of State. Uh. He appraises the

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Speaker 1: President for making the strikes that he made yesterday and

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Speaker 1: then says, quote, the real test for Mr Trump is

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Speaker 1: what comes next? What does come next? As you see

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Speaker 1: in well, I think there's several things that need to

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Speaker 1: come next. On the one hand, there needs to be

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Speaker 1: some quiet messages to the Russians UH, to the Iranians,

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Speaker 1: and also to the outside regime, perhaps delivered through the Russians,

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Speaker 1: that this was a step taken because there has to

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Speaker 1: be a price when chemical weapons are used, otherwise they

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Speaker 1: become a normal weapon and that's not acceptable, but that

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Speaker 1: the US is not interested in seeing an escalation and

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Speaker 1: we shouldn't be tested. The Russians should look at this

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Speaker 1: as a moment where now it's time to try to

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Speaker 1: actually think about a diplomatic way out of Syria. It's

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Speaker 1: time for the Russians to go back and embrace the

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Speaker 1: very principles they adopted in the Security Council resolution with US,

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Speaker 1: one which was done during the Obama administration a little

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Speaker 1: over a year ago, maybe slightly over a year ago UH,

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Speaker 1: in which they committed to a ceasefire, assessation of hostilities.

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Speaker 1: They committed to ending the sieges of towns, the humanitarian

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Speaker 1: sieges of towns, the unencumbered access of provision of humanitarian

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Speaker 1: assistance in an eighteen month political transition period. If you

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Speaker 1: want to find a way out of Syria, or at

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Speaker 1: least you want to find a way to manage what

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Speaker 1: has been a humanitarian catastrophe. You need to find a

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Speaker 1: way to end the war, and the only way that

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Speaker 1: can be done is if you go back to those principles.

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Speaker 1: And this message to the Russian should be this isn't

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Speaker 1: the time to escalate. This is a time for you

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Speaker 1: to embrace principles. But those principles are ones who actually

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Speaker 1: never implemented with the Iranians. If you think that testing

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Speaker 1: us now is going to be good for you, to

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Speaker 1: think again. We've just demonstrated that when we say something,

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Speaker 1: you should heed our words. Here again, we're not looking

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Speaker 1: to make it worse. Don't you take a step in

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Speaker 1: that direction. Let me drop on your your your deep

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Speaker 1: diplomatic experience here. I'm looking at a quotation here from

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Speaker 1: the Iranian foreign minister who said that what we saw

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Speaker 1: last night was the U S resorting to military force

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Speaker 1: over Bogus chemical weapons allegations, drawing a line back to

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Speaker 1: two thousand three and what got us into engagement in

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Speaker 1: the war in Iraq. This is an area, this is

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Speaker 1: an era rather where fake news has become a term

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Speaker 1: of the day. How do you interact with a country

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Speaker 1: like Iran and to an extent like Russia, who isn't

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Speaker 1: uh meeting US at face when it comes to to

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Speaker 1: what we saw in Syria earlier this week, right, well again,

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Speaker 1: I mean, look, they may adopt a public posture that's

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Speaker 1: designed to to demonstrate they weren't in the wrong. What

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Speaker 1: you're seeing is the Russians sort of publicly doubling down.

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Speaker 1: I think they're doing it because Putin never wants the

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Speaker 1: US to use force and look decisive in doing so.

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Speaker 1: But he's also not interested in escalating things either, because

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Speaker 1: he's already achieved what he wants in Syria. As for

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Speaker 1: the Iranians, what they care about is basically preserving right

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Speaker 1: now the Asad regime. Uh. And here's a great irony.

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Speaker 1: Only a few days ago he had the Secretary of

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Speaker 1: State saying that it was up to the future of us,

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Speaker 1: I was up to the Arian people. Wells own actions

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Speaker 1: have put that at risk now. So in terms of

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Speaker 1: your question, I think the answers. Whatever they say publicly,

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Speaker 1: you communicate something privately they want to move in a

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Speaker 1: different direction than they're doing it at their risk. The

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Speaker 1: fact is, neither the Russians nor the Iranians are great

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Speaker 1: risk takers. They're very good at drawing on others, and

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Speaker 1: so one of the things to do now is not

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Speaker 1: to confront them publicly. If you confront countries publicly, you

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Speaker 1: put them in a position where it's hard to be

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Speaker 1: right now, you communicate privately, then you find a way

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Speaker 1: perhaps to to move back from where we are. Ambassador Ross,

432
00:23:06,960 --> 00:23:10,280
Speaker 1: you have more experience, I think than anyone breathing, and

433
00:23:10,400 --> 00:23:14,920
Speaker 1: our presidents adapt, adjust and become overcome by events. You

434
00:23:15,000 --> 00:23:18,240
Speaker 1: could hear it in the President's voice last night. With

435
00:23:18,440 --> 00:23:21,840
Speaker 1: these events, are we finally going to get an ascension

436
00:23:22,119 --> 00:23:26,479
Speaker 1: of our cabinet officers and finally get the offices filled

437
00:23:27,080 --> 00:23:30,399
Speaker 1: at the Pentagon, at the State Department, and frankly at

438
00:23:30,440 --> 00:23:33,800
Speaker 1: the other departments as well. I mean, I think here

439
00:23:33,880 --> 00:23:38,800
Speaker 1: of the need for perspective and conversation to assist our president,

440
00:23:39,240 --> 00:23:46,320
Speaker 1: was last night a shift towards normalization of domestic policy? Well,

441
00:23:46,680 --> 00:23:49,480
Speaker 1: it may be too soon to say, because it still

442
00:23:49,560 --> 00:23:52,000
Speaker 1: is going to take the administration some time to fill

443
00:23:52,080 --> 00:23:54,120
Speaker 1: all the sluts that are available. But I think one

444
00:23:54,160 --> 00:23:57,639
Speaker 1: thing that emerges. You seem to have had a pretty

445
00:23:57,680 --> 00:24:01,600
Speaker 1: systematic deliberative process over a period of time that involved

446
00:24:02,200 --> 00:24:06,160
Speaker 1: the key the key national security players, meaning the secreated,

447
00:24:06,359 --> 00:24:09,680
Speaker 1: the Secretary States Secretary of Defense and the National Security Advisor.

448
00:24:10,240 --> 00:24:13,440
Speaker 1: They seem to have very quickly organized the process, made

449
00:24:13,520 --> 00:24:19,440
Speaker 1: certain that the necessary intelligence was available, communicated to key

450
00:24:19,520 --> 00:24:24,479
Speaker 1: allies UH in advance, UH, and and presented the president

451
00:24:24,560 --> 00:24:26,480
Speaker 1: what were a series of options. Well, that's the way

452
00:24:26,520 --> 00:24:30,280
Speaker 1: the process is supposed to work. The geometry here is important.

453
00:24:30,320 --> 00:24:35,119
Speaker 1: A hundred miles in Damascus to the west, the navy yards,

454
00:24:35,200 --> 00:24:39,120
Speaker 1: the Soviet Jews, the Russians rather use in the eastern Mediterranean.

455
00:24:39,480 --> 00:24:42,840
Speaker 1: There's a small nation up above Turkey. It has a

456
00:24:42,920 --> 00:24:46,520
Speaker 1: real vested interest in these affairs. How should President Trump

457
00:24:47,160 --> 00:24:52,360
Speaker 1: in his government address in Calm, Turkey this morning. Well,

458
00:24:52,400 --> 00:24:54,520
Speaker 1: interesting that the Turks came out very quickly, and we're

459
00:24:54,560 --> 00:24:57,879
Speaker 1: supportive of this. We're gonna find, by the way, that

460
00:24:58,080 --> 00:25:01,080
Speaker 1: many all of our traditional friends and partners in the

461
00:25:01,160 --> 00:25:04,600
Speaker 1: region are heartened by this, you know, fairly are not

462
00:25:04,880 --> 00:25:09,040
Speaker 1: They perceived the Obama administration as basically withdrawing from the

463
00:25:09,119 --> 00:25:12,240
Speaker 1: region or withdrawing from our responsibilities in the region. Well,

464
00:25:12,280 --> 00:25:15,919
Speaker 1: I think that was an exaggerated perception. Nonetheless, they had it, uh.

465
00:25:16,080 --> 00:25:20,000
Speaker 1: And now what they've seen is not just rhetoric from

466
00:25:20,000 --> 00:25:23,399
Speaker 1: the Trump administration, but now they've seen an action that

467
00:25:23,640 --> 00:25:26,040
Speaker 1: is reassuring, if for no other reason than making it

468
00:25:26,119 --> 00:25:29,520
Speaker 1: clear there's a price if you use chemical weapons, and

469
00:25:29,640 --> 00:25:32,520
Speaker 1: the idea that us it could flaunt the international community

470
00:25:32,680 --> 00:25:35,520
Speaker 1: and price world. He clearly thought he wasn't going to

471
00:25:35,600 --> 00:25:37,960
Speaker 1: pay a price for He wouldn't have done this. That's

472
00:25:38,160 --> 00:25:40,919
Speaker 1: ross are calleg Nick Wadham's cover scorn policy for Uce.

473
00:25:40,960 --> 00:25:42,959
Speaker 1: He's at Marlago. He was at the briefing last night

474
00:25:43,000 --> 00:25:45,560
Speaker 1: that a Trumac master gave with Secretary State Rex Tillerson,

475
00:25:45,600 --> 00:25:47,960
Speaker 1: and the takeaway from that was both of those men say,

476
00:25:48,000 --> 00:25:51,040
Speaker 1: this is a one off. We shouldn't try any conclusions here.

477
00:25:51,119 --> 00:25:53,960
Speaker 1: This is going to lead to more strikes. How difficult

478
00:25:54,040 --> 00:25:55,840
Speaker 1: is it going to be to keep that that policy?

479
00:25:55,880 --> 00:25:57,840
Speaker 1: In other words, you make a strike like this one

480
00:25:57,920 --> 00:26:01,399
Speaker 1: is it is it more difficult the next time around? Well,

481
00:26:01,440 --> 00:26:05,159
Speaker 1: I think the real problem is the response of the

482
00:26:05,280 --> 00:26:08,760
Speaker 1: Syrians and the Iranians and even the Russians. You know,

483
00:26:09,000 --> 00:26:13,440
Speaker 1: if if in fact they want to draw us in

484
00:26:13,520 --> 00:26:15,879
Speaker 1: to do more, it's pretty easy for them to do so.

485
00:26:16,840 --> 00:26:19,520
Speaker 1: If Asad, for example, were to carry another chemical strike,

486
00:26:20,000 --> 00:26:22,640
Speaker 1: we would be duty bound to take an additional step,

487
00:26:22,760 --> 00:26:24,879
Speaker 1: and it would have to be in some ways more decisive.

488
00:26:25,720 --> 00:26:29,480
Speaker 1: Now I think that's not so likely, But I do

489
00:26:29,680 --> 00:26:32,680
Speaker 1: think it's possible that they could help the ANNY on

490
00:26:32,760 --> 00:26:35,520
Speaker 1: the ground in Syria's a way of showing that they

491
00:26:35,560 --> 00:26:40,120
Speaker 1: weren't cowed, they weren't intimidated. Still, the problem that Asad

492
00:26:40,200 --> 00:26:45,239
Speaker 1: has is Asad has very limited ground forces, and if

493
00:26:45,280 --> 00:26:48,280
Speaker 1: he decides to do more like dropping barrel bombs and

494
00:26:48,320 --> 00:26:52,480
Speaker 1: the like, the fact is he still depends upon the

495
00:26:52,520 --> 00:26:56,480
Speaker 1: Iranians and the Yushashia militias to extend his control over territory.

496
00:26:57,160 --> 00:26:59,840
Speaker 1: They were the Iranians and the Russians have invested in

497
00:27:00,119 --> 00:27:03,440
Speaker 1: preserving us that in power. They haven't invested in having

498
00:27:03,600 --> 00:27:07,280
Speaker 1: him take back every inciente. Serious, So you know they

499
00:27:07,400 --> 00:27:10,439
Speaker 1: have some dilemmas they face. Two. The question we're going

500
00:27:10,480 --> 00:27:12,640
Speaker 1: to see within the next couple of days is are

501
00:27:12,680 --> 00:27:15,639
Speaker 1: they willing to try to demonstrate that this wasn't decisive?

502
00:27:16,080 --> 00:27:18,639
Speaker 1: Are they willing to test to see whether or not

503
00:27:19,600 --> 00:27:21,920
Speaker 1: the administration is prepared to do more. I have about

504
00:27:21,920 --> 00:27:23,879
Speaker 1: thirty seconds left with you, Mr Ambassador. We had to

505
00:27:24,000 --> 00:27:26,360
Speaker 1: Nikki Haley, the Ambassador to the U N telling Great

506
00:27:26,400 --> 00:27:29,720
Speaker 1: of Ancestral on MSNBC that we don't do soft power.

507
00:27:30,680 --> 00:27:34,920
Speaker 1: How worried are you about rhetoric like that? Well, you know,

508
00:27:35,000 --> 00:27:39,480
Speaker 1: I think everybody does soft power. You know the value

509
00:27:39,480 --> 00:27:42,560
Speaker 1: of soft powers that it makes you, It makes others

510
00:27:42,680 --> 00:27:44,960
Speaker 1: want to be like you, It draws others to you.

511
00:27:45,200 --> 00:27:48,280
Speaker 1: So I wouldn't be so quick to dispense with soft power.

512
00:27:48,440 --> 00:27:51,280
Speaker 1: Hard power, by the way, is a necessary part of

513
00:27:51,359 --> 00:27:55,600
Speaker 1: effective diplomacy. There is a coercive element to effective diplomacy.

514
00:27:56,320 --> 00:27:58,280
Speaker 1: We've just applied that. Now we should follow up in

515
00:27:58,320 --> 00:28:00,280
Speaker 1: a way and take advantage of some of the ages

516
00:28:00,320 --> 00:28:03,040
Speaker 1: as may have brought Dennis Ross. Thank you so much,

517
00:28:03,080 --> 00:28:06,280
Speaker 1: Abassador Ross with the Washington Institute, of course, with his

518
00:28:06,400 --> 00:28:20,959
Speaker 1: public service uh this morning and now joining us from

519
00:28:21,000 --> 00:28:24,280
Speaker 1: Jani's capital, Bill Gross's job today in a real move

520
00:28:24,359 --> 00:28:27,680
Speaker 1: here again to recap folks, and really quite important. A

521
00:28:27,760 --> 00:28:31,200
Speaker 1: hundred and seventy thousand was the statistic. We went less

522
00:28:31,840 --> 00:28:36,200
Speaker 1: eighty nine thousand with a bad revision, which really gets

523
00:28:36,240 --> 00:28:39,560
Speaker 1: you down somewhere in the vicinity of a fifty thousand

524
00:28:39,640 --> 00:28:43,760
Speaker 1: plus statistic, A big disappointment. Bill Gross, Good morning. You're

525
00:28:43,760 --> 00:28:47,280
Speaker 1: in Newport Beach, California, where the weather is never an issue.

526
00:28:47,640 --> 00:28:49,360
Speaker 1: Are you gonna are you gonna say that this is

527
00:28:49,440 --> 00:28:51,720
Speaker 1: just about weather in the Northeast where I had a

528
00:28:51,800 --> 00:28:57,920
Speaker 1: miserable winter. I would never totally blame it on the winter,

529
00:28:58,400 --> 00:29:01,320
Speaker 1: just like I wouldn't on a baseball game that's opening

530
00:29:01,440 --> 00:29:03,680
Speaker 1: in early April, um to day of the games of

531
00:29:03,680 --> 00:29:06,880
Speaker 1: the game. I think, Um, you know, it's a weak report.

532
00:29:06,960 --> 00:29:10,880
Speaker 1: The numbers is uh much less than expected, perhaps at

533
00:29:10,920 --> 00:29:13,840
Speaker 1: the beginning of a trend, as Jim Glassman suggested. But

534
00:29:14,760 --> 00:29:18,680
Speaker 1: you know, uh, interest rates themselves are already very very low,

535
00:29:18,800 --> 00:29:21,560
Speaker 1: and I wouldn't expect something like this to continue to

536
00:29:21,640 --> 00:29:25,120
Speaker 1: push interest rates lower. The push that's coming, I think

537
00:29:25,280 --> 00:29:27,440
Speaker 1: is in the curve as opposed to the absolute level

538
00:29:27,520 --> 00:29:29,720
Speaker 1: of interest rate. One of the great distinctions you're linking

539
00:29:29,760 --> 00:29:32,320
Speaker 1: in this labor report bill gross into the greater economy,

540
00:29:32,400 --> 00:29:36,600
Speaker 1: Ellen Zanner Morgan Stanley arguably with a doverish call even

541
00:29:36,760 --> 00:29:39,760
Speaker 1: she suggested today this is a FED with two three

542
00:29:39,920 --> 00:29:43,320
Speaker 1: rate increases out in front. Is this the kind of

543
00:29:43,520 --> 00:29:48,000
Speaker 1: report it can be enough to nudge the FED parlor

544
00:29:48,120 --> 00:29:54,400
Speaker 1: game towards a more dubblish Jennet Yellen, Well, perhaps you know,

545
00:29:54,480 --> 00:29:57,040
Speaker 1: if you have continue for another month or two, Uh,

546
00:29:57,640 --> 00:30:00,480
Speaker 1: you know, anything below two hundred thousand and trending downward

547
00:30:00,520 --> 00:30:04,680
Speaker 1: would be a indicative a weaker job growth economy. And

548
00:30:04,800 --> 00:30:07,600
Speaker 1: we know the FED points to job growth not necessarily

549
00:30:07,640 --> 00:30:10,920
Speaker 1: it's a g d P growth because GDP growth has

550
00:30:11,000 --> 00:30:14,520
Speaker 1: been two percent or less BLUs or minus for some

551
00:30:14,760 --> 00:30:19,080
Speaker 1: time now. So um yeah, I think the Fed, in

552
00:30:19,200 --> 00:30:23,440
Speaker 1: the terms of their minutes, was becoming increasingly delvish. I

553
00:30:23,600 --> 00:30:28,040
Speaker 1: to think Dudley this week has indicated that he would

554
00:30:28,560 --> 00:30:31,320
Speaker 1: uh look at tapering and that he would combine it

555
00:30:31,440 --> 00:30:35,160
Speaker 1: with the potential for further interest rate increases in terms

556
00:30:35,200 --> 00:30:39,400
Speaker 1: of a combo, so to speak, and that to me

557
00:30:39,640 --> 00:30:44,160
Speaker 1: is an indication of a gradual slopecase, which I've indicated

558
00:30:44,240 --> 00:30:46,720
Speaker 1: that the FED has to do going forward because of

559
00:30:46,760 --> 00:30:49,240
Speaker 1: a highly leveled economy. I want to say here, David

560
00:30:49,280 --> 00:30:52,120
Speaker 1: girl risk off trade right now, folks. Even Swiss Frank

561
00:30:52,240 --> 00:30:55,720
Speaker 1: comes in stronger Swiss Frank and yen is stronger. We

562
00:30:55,800 --> 00:30:58,280
Speaker 1: didn't see that off the Syria tacks, but we do

563
00:30:58,480 --> 00:31:02,360
Speaker 1: now see David Gura, uh, the yen moving off, moving

564
00:31:02,480 --> 00:31:04,840
Speaker 1: stronger rather with a risk off field, David Growl, why

565
00:31:04,840 --> 00:31:07,160
Speaker 1: don't you jumping Bill Gross? Jim Glassman called these monthly

566
00:31:07,240 --> 00:31:09,800
Speaker 1: numbers noise. We had Janet Yellen calling the GDP numbers

567
00:31:09,880 --> 00:31:11,600
Speaker 1: noisy at her last press conference. I want to ask

568
00:31:11,600 --> 00:31:14,080
Speaker 1: you about the integrity of the data here and how

569
00:31:14,120 --> 00:31:16,560
Speaker 1: you regard the data. We had the White House at

570
00:31:16,600 --> 00:31:18,840
Speaker 1: its daily press briefing saying last time it trusts the

571
00:31:18,880 --> 00:31:21,080
Speaker 1: data when the data were good. What do you expect

572
00:31:21,120 --> 00:31:23,040
Speaker 1: them to do in terms of reaction to these data?

573
00:31:23,080 --> 00:31:27,040
Speaker 1: How are you regarding the data right now? Well, I

574
00:31:27,080 --> 00:31:29,960
Speaker 1: think data can be noisy, uh fake data. I'm not

575
00:31:30,120 --> 00:31:34,560
Speaker 1: necessarily fake, but noisy data certainly can move markets in

576
00:31:34,600 --> 00:31:37,440
Speaker 1: the short term and not necessarily over a longer term basis.

577
00:31:37,480 --> 00:31:41,640
Speaker 1: I think that the focus really for economic growth going

578
00:31:41,720 --> 00:31:45,280
Speaker 1: forward is not necessarily job growth, but productivity growth. And

579
00:31:45,360 --> 00:31:49,080
Speaker 1: as we've known for some years now, productivity growth is

580
00:31:49,440 --> 00:31:52,120
Speaker 1: hovering around a one percent level. Of the questions as

581
00:31:52,160 --> 00:31:55,640
Speaker 1: to why are numerous, but I would suggest that, uh,

582
00:31:55,720 --> 00:31:58,560
Speaker 1: they're at one percent, which would imply a two percent

583
00:31:58,840 --> 00:32:01,800
Speaker 1: GDP growth rate, simply because there's been a lack of

584
00:32:01,920 --> 00:32:05,720
Speaker 1: investment and uh, you know, something having to do perhaps

585
00:32:05,840 --> 00:32:10,000
Speaker 1: with the uh paradox of thrift, something having to do

586
00:32:10,120 --> 00:32:13,760
Speaker 1: with lower demographics and changing demographics. It just seems that

587
00:32:14,760 --> 00:32:18,800
Speaker 1: investment is going into stocks and financial securities as opposed

588
00:32:18,800 --> 00:32:21,960
Speaker 1: to the real economy. And so if one percent productivity

589
00:32:22,000 --> 00:32:25,200
Speaker 1: continues to persist, then we've got a two percent GDP

590
00:32:25,360 --> 00:32:29,480
Speaker 1: growth rate, and that's not sufficient really to UM, you know,

591
00:32:29,640 --> 00:32:33,120
Speaker 1: to make investors happy. We see this market move. The

592
00:32:33,200 --> 00:32:35,320
Speaker 1: other big market move we've seen recently was last night

593
00:32:35,960 --> 00:32:39,200
Speaker 1: around the timing of these attacks on Syria. We've talked

594
00:32:39,200 --> 00:32:41,520
Speaker 1: about this before, but when you weigh the fundamentals against

595
00:32:41,600 --> 00:32:44,440
Speaker 1: the political realities, what's the bigger market driver to you

596
00:32:44,600 --> 00:32:49,000
Speaker 1: right now? Well, on a short term, certainly, you know,

597
00:32:49,120 --> 00:32:52,120
Speaker 1: bonds are a flight this safety. We saw that last night.

598
00:32:52,240 --> 00:32:54,959
Speaker 1: They came back a little bit. But UM and stocks

599
00:32:55,040 --> 00:32:57,560
Speaker 1: being risk assets, are are risk off in a very

600
00:32:57,640 --> 00:33:01,880
Speaker 1: short term. You know. Ultimately it's interesting in terms of conflict,

601
00:33:01,960 --> 00:33:05,360
Speaker 1: in terms of war, and we're talking several years here

602
00:33:05,800 --> 00:33:10,640
Speaker 1: as opposed to several days. But ultimately bonds, uh, you know,

603
00:33:10,800 --> 00:33:15,560
Speaker 1: fear war, conflict and reflection and equities. You tend to

604
00:33:15,640 --> 00:33:19,720
Speaker 1: benefit from the gearing up of the defense establishment and

605
00:33:20,240 --> 00:33:23,160
Speaker 1: profits related to it. And so it's a question of

606
00:33:23,280 --> 00:33:28,360
Speaker 1: time frame. Short term bond friendly, long term perhaps not

607
00:33:28,520 --> 00:33:31,760
Speaker 1: so bon friendly. Bill Gross with us worldwide on Bloomberg Television,

608
00:33:31,760 --> 00:33:34,120
Speaker 1: Bloomberg Radius. He does every job. Stay thrilled to have

609
00:33:34,240 --> 00:33:38,440
Speaker 1: him with us with Jannis Capital. Bill. Excuse me, I

610
00:33:38,480 --> 00:33:41,600
Speaker 1: looked through your portfolio and you've got some corporate paper,

611
00:33:41,680 --> 00:33:44,360
Speaker 1: and I see that you're grabbing coupon a year. How

612
00:33:44,440 --> 00:33:47,920
Speaker 1: are you going to protect from bond losses? Help our

613
00:33:48,400 --> 00:33:52,240
Speaker 1: listeners and viewers who are savers, how do they protect

614
00:33:52,360 --> 00:33:58,560
Speaker 1: themselves given the higher yields to come. Well, that's the

615
00:33:58,720 --> 00:34:04,000
Speaker 1: dynama of bond bear market always has been. We haven't

616
00:34:04,000 --> 00:34:07,360
Speaker 1: had significant bond bearing markets UH for a while. But

617
00:34:07,440 --> 00:34:10,000
Speaker 1: what you do tom as you suggested your term paper,

618
00:34:10,040 --> 00:34:12,360
Speaker 1: you cut your duration. That's the same thing as saying

619
00:34:12,840 --> 00:34:16,320
Speaker 1: you lower the maturity of your paper, whether it's treasures

620
00:34:16,440 --> 00:34:19,239
Speaker 1: or corporates to um. You know, what what fits your

621
00:34:19,320 --> 00:34:23,080
Speaker 1: mood or what fits your your fear level. I suppose

622
00:34:23,400 --> 00:34:26,760
Speaker 1: what does that mean? You know, typically the bond market

623
00:34:26,800 --> 00:34:29,759
Speaker 1: has an average maturity of seven years UM, and so

624
00:34:29,920 --> 00:34:32,439
Speaker 1: if you want to be protective relative to higher rates

625
00:34:32,520 --> 00:34:35,520
Speaker 1: and the negatives that happened with a seven year bond,

626
00:34:35,600 --> 00:34:38,839
Speaker 1: you reduce your maturities to five four, three, two one UM.

627
00:34:39,280 --> 00:34:42,120
Speaker 1: That's what we've done a genus and constrained our average

628
00:34:42,440 --> 00:34:45,520
Speaker 1: maturity is basically zero or even a little bit less

629
00:34:45,560 --> 00:34:49,520
Speaker 1: because derivatives exposure. So duration is the key and keep

630
00:34:49,560 --> 00:34:52,279
Speaker 1: it short. The problem with that, just to finish is

631
00:34:52,360 --> 00:34:54,560
Speaker 1: to say that, you know, the yields on the short

632
00:34:54,640 --> 00:34:56,560
Speaker 1: end of the yoak over much less. And if you're

633
00:34:57,320 --> 00:35:01,000
Speaker 1: striving for yield and grabbing for yield, maturity has hurt you.

634
00:35:01,440 --> 00:35:03,160
Speaker 1: Let me ask you here, we're looking at so much

635
00:35:03,200 --> 00:35:05,959
Speaker 1: foreign news. I wonder what that says to you about

636
00:35:05,960 --> 00:35:08,680
Speaker 1: the president's domestic agenda. The promise here was it would

637
00:35:08,680 --> 00:35:11,359
Speaker 1: get some tax reform and tax reform as soon. Whether

638
00:35:11,440 --> 00:35:13,359
Speaker 1: the promise of the Trump Trade as it's been called,

639
00:35:13,640 --> 00:35:17,160
Speaker 1: or has it withered almost all the way together? Well,

640
00:35:17,239 --> 00:35:20,400
Speaker 1: I think it's diminished, correct, you know, based upon his

641
00:35:21,160 --> 00:35:24,799
Speaker 1: ability to work with Congress and change healthcare. The expectation

642
00:35:24,880 --> 00:35:28,240
Speaker 1: now is that the fiscal program, whether it be infrastructure,

643
00:35:29,160 --> 00:35:33,200
Speaker 1: you know, whether it be a tax related, not necessarily

644
00:35:33,280 --> 00:35:36,040
Speaker 1: regulation related, because he seems to be able to do

645
00:35:36,239 --> 00:35:39,320
Speaker 1: that by executive order. But yes, it does appear that

646
00:35:39,760 --> 00:35:43,160
Speaker 1: the expectation for two thousand is seventeen two thousand and

647
00:35:43,200 --> 00:35:46,919
Speaker 1: eighteen in terms of its impact on economic growth would

648
00:35:46,960 --> 00:35:50,239
Speaker 1: be less. And what's that number. It's certainly not the

649
00:35:50,360 --> 00:35:54,719
Speaker 1: three Trump number that was politically correct only a month

650
00:35:54,800 --> 00:35:57,279
Speaker 1: or two months ago. But it's a two percent number

651
00:35:57,360 --> 00:36:01,400
Speaker 1: or less, and that impacts, yes, equity crisis going forward

652
00:36:01,480 --> 00:36:04,560
Speaker 1: because they depend on growth and corporate profits depend upon

653
00:36:05,280 --> 00:36:08,879
Speaker 1: a two GDP. Growth are higher in order to increase

654
00:36:09,040 --> 00:36:13,560
Speaker 1: not per share because companies are buying back their stocks,

655
00:36:13,640 --> 00:36:16,800
Speaker 1: but from a top line revenue and from a profit

656
00:36:16,920 --> 00:36:20,640
Speaker 1: margin level. The economy needs two percent for the stock

657
00:36:20,719 --> 00:36:23,719
Speaker 1: market basically to grow, and that's been diminished over the

658
00:36:23,760 --> 00:36:26,480
Speaker 1: past few weeks. Will help us here was something I

659
00:36:26,520 --> 00:36:29,880
Speaker 1: don't believe you studied, Duke, which is soft data and

660
00:36:30,080 --> 00:36:33,560
Speaker 1: hard data. I mean, I guess with this job's report,

661
00:36:33,640 --> 00:36:37,640
Speaker 1: the soft data crew are in retreat parts for us.

662
00:36:38,280 --> 00:36:40,840
Speaker 1: I mean, it's one month's data and there's weather issues.

663
00:36:40,920 --> 00:36:44,359
Speaker 1: I get it. Jeed Coco, the real estate guy out

664
00:36:44,640 --> 00:36:47,400
Speaker 1: making clear it was job losses all around, not just

665
00:36:47,560 --> 00:36:51,239
Speaker 1: about whether but help me here with the silliness of

666
00:36:51,320 --> 00:36:56,279
Speaker 1: a soft data hard data debate. You know, Tom, the

667
00:36:56,640 --> 00:37:00,279
Speaker 1: hardest data that that I look at and believe even

668
00:37:00,680 --> 00:37:04,000
Speaker 1: you know it comes from actual statistics in terms of

669
00:37:04,360 --> 00:37:08,640
Speaker 1: retail sales. I mean that's what um it's all about. Really, Uh,

670
00:37:08,840 --> 00:37:11,200
Speaker 1: you know our retail sales, either on the same store

671
00:37:11,239 --> 00:37:14,960
Speaker 1: basis or in general, are they increasing and at what

672
00:37:15,080 --> 00:37:17,400
Speaker 1: place are they increasing? I think we can trust that

673
00:37:17,800 --> 00:37:20,160
Speaker 1: in terms of hard data much more than any of

674
00:37:20,239 --> 00:37:24,400
Speaker 1: these soft data they're based upon surveys. I don't need

675
00:37:24,560 --> 00:37:26,239
Speaker 1: erupt you. I just I just want to know what

676
00:37:26,320 --> 00:37:27,880
Speaker 1: you're gonna do this morning so I can try to

677
00:37:27,960 --> 00:37:31,319
Speaker 1: make some money to pay my taxes. Your sharper, you're

678
00:37:31,360 --> 00:37:33,839
Speaker 1: one of Your sharp ratio is pretty good. I made

679
00:37:33,920 --> 00:37:37,320
Speaker 1: really challenging performance. And all that I get that is

680
00:37:37,400 --> 00:37:40,680
Speaker 1: Bill grows gonna load the boat this morning because all

681
00:37:40,719 --> 00:37:47,040
Speaker 1: the talk about three g d P is not gonna happen. Well,

682
00:37:47,120 --> 00:37:49,680
Speaker 1: I think increasingly, yes, And how do you load the boat? Well,

683
00:37:49,760 --> 00:37:53,959
Speaker 1: you you certainly don't own risk assets, and you don't

684
00:37:54,000 --> 00:37:57,319
Speaker 1: own high old bonds because uh, you know, lower growth

685
00:37:57,400 --> 00:38:00,720
Speaker 1: will lead to or have a tendency for the spreads.

686
00:38:00,800 --> 00:38:04,440
Speaker 1: And you also look tom in terms of monetary policy.

687
00:38:04,520 --> 00:38:06,400
Speaker 1: You look not just at the US in terms of

688
00:38:06,440 --> 00:38:10,080
Speaker 1: the fit, and they're tapering or they're uh not tapering.

689
00:38:10,160 --> 00:38:12,880
Speaker 1: In late two thousand and seventeen and eighteen. But you

690
00:38:12,960 --> 00:38:16,400
Speaker 1: also look overseas, you look at Germany. To me, uh,

691
00:38:16,600 --> 00:38:19,719
Speaker 1: you know, Germany is the most overvalued bond market. Not

692
00:38:19,880 --> 00:38:22,680
Speaker 1: in the world, because we've got the j g BS

693
00:38:22,719 --> 00:38:24,320
Speaker 1: and the b O J to compare it to. But

694
00:38:24,680 --> 00:38:27,600
Speaker 1: in any case, they're injecting eighty billion dollars a month

695
00:38:27,719 --> 00:38:31,160
Speaker 1: into their market the ten years at twenty basis points

696
00:38:31,400 --> 00:38:33,399
Speaker 1: all the way out to seven and a half years.

697
00:38:33,440 --> 00:38:36,360
Speaker 1: In terms of the buon market, you've got negative yields.

698
00:38:36,440 --> 00:38:39,880
Speaker 1: And if anyone would argue that's a normal type of market,

699
00:38:39,920 --> 00:38:43,000
Speaker 1: I would tend to vehemently disagree. And so you know,

700
00:38:43,200 --> 00:38:47,000
Speaker 1: shorting German buns and yes, even going long treasuries at

701
00:38:47,120 --> 00:38:50,960
Speaker 1: twenty basis points spread, to me is a very attractive

702
00:38:51,000 --> 00:38:53,399
Speaker 1: trade because one of these days that spreads gonna narrow

703
00:38:53,480 --> 00:38:56,160
Speaker 1: and in the meantime you've got a high yield or

704
00:38:56,160 --> 00:38:59,600
Speaker 1: a high carry German yields. David Girl, lower it right now,

705
00:39:00,040 --> 00:39:03,320
Speaker 1: GULDI point eight zero three on the two year yield.

706
00:39:03,840 --> 00:39:05,879
Speaker 1: I wasn't gonna say that because I'm afraid Gross will

707
00:39:05,920 --> 00:39:09,839
Speaker 1: both the interview, but there is with a lower negative use.

708
00:39:11,320 --> 00:39:13,520
Speaker 1: You got it right there too, Okay, Bill Gross is

709
00:39:14,320 --> 00:39:17,600
Speaker 1: keeping trucking. He's doing that. Folks off his Bloomberg terminal.

710
00:39:18,920 --> 00:39:23,959
Speaker 1: It is a it is a Bloomberg. That's Christ. That's good, Phil, Phil.

711
00:39:23,960 --> 00:39:26,000
Speaker 1: There's been so much talk about and focus on the

712
00:39:26,200 --> 00:39:28,440
Speaker 1: Fed's balance sheet this week, in particulars we got those

713
00:39:28,440 --> 00:39:30,120
Speaker 1: minutes from the from the f OMC. Let me put

714
00:39:30,160 --> 00:39:32,880
Speaker 1: a question to you. I put to Jerome Schneider yesterday.

715
00:39:33,280 --> 00:39:35,160
Speaker 1: Can the FED walk and chew gum at the same

716
00:39:35,200 --> 00:39:37,200
Speaker 1: time as it begins to unwind this balance sheet? Can

717
00:39:37,239 --> 00:39:41,000
Speaker 1: it raise rates at the same time. Well, I think

718
00:39:41,040 --> 00:39:44,040
Speaker 1: it's hard, you know, Dudley suggested in order to avoid

719
00:39:44,120 --> 00:39:47,279
Speaker 1: the fear of a tantrum, he suggested that if they

720
00:39:47,400 --> 00:39:50,480
Speaker 1: do begin to reduce their balance sheet or to uh

721
00:39:51,000 --> 00:39:54,320
Speaker 1: to lower the level of reinvestment, which is basically the

722
00:39:54,440 --> 00:39:57,200
Speaker 1: same thing, that maybe the interest rate increases will be

723
00:39:57,320 --> 00:40:01,520
Speaker 1: a little more gradual, and so that's tended to placate

724
00:40:01,560 --> 00:40:04,040
Speaker 1: investors e leits over the short term and to avoid

725
00:40:04,120 --> 00:40:06,360
Speaker 1: a tantrum. I'm not so sure, you know. Over the

726
00:40:07,120 --> 00:40:10,120
Speaker 1: past three, six, twelve months with you guys here in

727
00:40:10,160 --> 00:40:13,359
Speaker 1: the morning and elsewhere, I've suggested I don't think think

728
00:40:13,440 --> 00:40:16,600
Speaker 1: the FED could ever reduce its balance sheet because to

729
00:40:16,719 --> 00:40:18,920
Speaker 1: my way of thinking, and it's too complicated to talk

730
00:40:19,000 --> 00:40:21,240
Speaker 1: to you know, the Fed's balance sheet is a reflection

731
00:40:21,280 --> 00:40:23,920
Speaker 1: of the leverage of the economy, and if they reduced

732
00:40:23,960 --> 00:40:26,760
Speaker 1: the four point five trillion to two point five trillion,

733
00:40:27,080 --> 00:40:30,040
Speaker 1: to me, that's levering up the economy in a way

734
00:40:30,680 --> 00:40:33,359
Speaker 1: that approaches what we experienced in two thousand and six

735
00:40:33,440 --> 00:40:35,680
Speaker 1: and two thousand and seven. I don't think they're going

736
00:40:35,719 --> 00:40:38,000
Speaker 1: to do that, And I think maybe this has just

737
00:40:38,120 --> 00:40:40,080
Speaker 1: talked to improve the yield curve to make it more

738
00:40:40,160 --> 00:40:43,359
Speaker 1: positive and to help bank profit margins. But that would

739
00:40:43,400 --> 00:40:46,600
Speaker 1: be a little suspicious on my part, and so I'll

740
00:40:47,280 --> 00:40:49,800
Speaker 1: just suspect, how does it pro like you play the

741
00:40:49,880 --> 00:40:52,680
Speaker 1: personnel issue at the FED? You've got Yellen coming to

742
00:40:52,719 --> 00:40:54,640
Speaker 1: the end of her term, so many vacancies on the

743
00:40:54,680 --> 00:40:58,000
Speaker 1: FED reserve the possibility here of a very different direction

744
00:40:58,520 --> 00:41:03,239
Speaker 1: when it comes to the FED. How you playing that well?

745
00:41:03,360 --> 00:41:07,840
Speaker 1: I consider the fact that in in a historical perspective,

746
00:41:07,960 --> 00:41:11,640
Speaker 1: that other presidents have appointed dubs because they want to

747
00:41:12,120 --> 00:41:15,719
Speaker 1: be reelected in the following four years, and so I

748
00:41:16,200 --> 00:41:19,520
Speaker 1: would think that Trump would do that that Janet Yellen,

749
00:41:20,000 --> 00:41:24,960
Speaker 1: uh may be even reappointed, because she is indicated to

750
00:41:25,120 --> 00:41:27,879
Speaker 1: me that you know, she's very much of a dub

751
00:41:27,960 --> 00:41:31,560
Speaker 1: And so I would expect that the FED governors and

752
00:41:32,320 --> 00:41:37,760
Speaker 1: ultimately FED presidents would be a very devilish board going forward,

753
00:41:37,960 --> 00:41:40,720
Speaker 1: very cautious board. And I think there's a good argument

754
00:41:40,800 --> 00:41:43,880
Speaker 1: for caution based upon the leverage. Although you know, as

755
00:41:43,960 --> 00:41:47,000
Speaker 1: you know, in past years, I've argued that these low

756
00:41:47,120 --> 00:41:50,959
Speaker 1: interest rates are very much affecting insurance companies and pension funds,

757
00:41:51,000 --> 00:41:54,120
Speaker 1: and ultimately something has to be done to renormalize rates

758
00:41:54,239 --> 00:41:57,440
Speaker 1: or else many of them are going to go bankrupt.

759
00:41:58,040 --> 00:42:00,359
Speaker 1: Bill Gross wouldn't find a question if we could this morning,

760
00:42:00,480 --> 00:42:03,439
Speaker 1: Mr Diamond out with an annual report letter this week

761
00:42:03,520 --> 00:42:06,960
Speaker 1: really talking about the man session that we see across

762
00:42:07,040 --> 00:42:11,080
Speaker 1: this nation of getting people structurally and importantly employed. Do

763
00:42:11,200 --> 00:42:13,399
Speaker 1: we just need g dB growth or is it much

764
00:42:13,440 --> 00:42:15,800
Speaker 1: more than that? From where you sit with your decades

765
00:42:15,840 --> 00:42:19,080
Speaker 1: of experience, do we need something more? Do we need

766
00:42:19,160 --> 00:42:24,600
Speaker 1: a program a policy to fully employ America? Yeah? I

767
00:42:24,719 --> 00:42:27,560
Speaker 1: think so, And it goes way back to the Kennedy administration,

768
00:42:27,640 --> 00:42:30,879
Speaker 1: I guess, which is far far back, but in terms

769
00:42:30,920 --> 00:42:33,760
Speaker 1: of the AmeriCorps and in terms of a jobs program

770
00:42:33,840 --> 00:42:38,120
Speaker 1: that we're reflected in the FDR administration. I think, yes,

771
00:42:38,360 --> 00:42:41,600
Speaker 1: that the government has to be almost directly involved in

772
00:42:42,120 --> 00:42:45,719
Speaker 1: providing jobs for those that want jobs. And as as

773
00:42:45,760 --> 00:42:48,399
Speaker 1: we've seen with the U six number, it's coming down,

774
00:42:48,520 --> 00:42:50,960
Speaker 1: but it's still about nine. There's a lot of Americans

775
00:42:51,000 --> 00:42:53,000
Speaker 1: out there that want jobs that can't find jobs in

776
00:42:53,080 --> 00:42:55,319
Speaker 1: the private sector, and I think the public sector should

777
00:42:55,960 --> 00:43:00,600
Speaker 1: provide the the impetus for that growth bill. Gross thank

778
00:43:00,640 --> 00:43:02,960
Speaker 1: you so much, greatly appreciate it. With Jana's capital with

779
00:43:03,080 --> 00:43:17,880
Speaker 1: markets on the move, UH this morning. Now we need

780
00:43:17,960 --> 00:43:23,040
Speaker 1: to go to another conversation, this with Gary Cone of

781
00:43:23,120 --> 00:43:27,840
Speaker 1: the Trump administration in law in Florida. I would say, actually, Gary,

782
00:43:28,000 --> 00:43:31,240
Speaker 1: welcome to the program. So we have some jobs numbers

783
00:43:31,239 --> 00:43:33,560
Speaker 1: out here. It's good to have you. As always. Uh,

784
00:43:33,760 --> 00:43:35,279
Speaker 1: we have some jobs numbers Herery, we have you. I

785
00:43:35,360 --> 00:43:37,360
Speaker 1: had an opportunity to talk to the president. What is

786
00:43:37,400 --> 00:43:41,880
Speaker 1: your reaction, What is his reaction? Yes, I've definitely had

787
00:43:41,880 --> 00:43:44,560
Speaker 1: an opportunity to talk to the president. UM. Overall, we're

788
00:43:44,560 --> 00:43:46,719
Speaker 1: pretty plays with the jobs numbers the very place. When

789
00:43:46,760 --> 00:43:50,080
Speaker 1: you look at the unemployment numbers going down, both the

790
00:43:50,640 --> 00:43:53,800
Speaker 1: four point seven number going down as well as the

791
00:43:54,080 --> 00:43:56,680
Speaker 1: UH the higher the U six number. We actually spent

792
00:43:56,760 --> 00:43:58,480
Speaker 1: a lot of time looking at the U six number

793
00:43:58,760 --> 00:44:01,680
Speaker 1: coming down by three tenths percent. We're pretty pleased with

794
00:44:01,760 --> 00:44:05,160
Speaker 1: what's going on in the unemployment picture here. And then

795
00:44:05,239 --> 00:44:07,000
Speaker 1: you take that and you put on top of that

796
00:44:07,120 --> 00:44:09,480
Speaker 1: what we know is coming with all the jobs that

797
00:44:09,560 --> 00:44:12,400
Speaker 1: are being created by the companies we've talked to UH

798
00:44:12,520 --> 00:44:15,080
Speaker 1: and moving manufacturing back to the United States. Were very

799
00:44:15,120 --> 00:44:16,640
Speaker 1: excited about what's going to be going on in the

800
00:44:16,719 --> 00:44:18,839
Speaker 1: future here. So the President has in the past talking

801
00:44:18,840 --> 00:44:21,359
Speaker 1: about the underemployed, not just the unemployed, the U six

802
00:44:21,440 --> 00:44:23,719
Speaker 1: numbers you just said, is that perhaps one of the

803
00:44:23,760 --> 00:44:25,880
Speaker 1: most important things you and the President look at as

804
00:44:25,880 --> 00:44:29,880
Speaker 1: you get this report card every month. Absolutely, the President

805
00:44:29,920 --> 00:44:31,400
Speaker 1: I have spent a lot of time talking about the

806
00:44:31,480 --> 00:44:34,359
Speaker 1: U six number. You know, those those are, as you said,

807
00:44:34,440 --> 00:44:37,080
Speaker 1: the underemployed people, the people that we think are working

808
00:44:37,160 --> 00:44:39,279
Speaker 1: in jobs that they could work in a better job

809
00:44:39,360 --> 00:44:41,279
Speaker 1: if the dreador job is out there for them. And

810
00:44:41,360 --> 00:44:43,520
Speaker 1: that number coming down by three tents of a percent

811
00:44:43,880 --> 00:44:46,920
Speaker 1: is very exciting for us UM and we're happy to

812
00:44:46,920 --> 00:44:49,680
Speaker 1: see that number below nine percent. Obviously, we'd like to

813
00:44:49,719 --> 00:44:51,759
Speaker 1: get that number lower. But that's the number we're spending

814
00:44:51,800 --> 00:44:54,080
Speaker 1: a lot of time looking at, so very exactly what

815
00:44:54,360 --> 00:44:56,360
Speaker 1: do you and the President think you can do to

816
00:44:56,800 --> 00:44:59,160
Speaker 1: address that number. What are the specific initiatives that you

817
00:44:59,200 --> 00:45:01,680
Speaker 1: think will have the most defect. Is it fiscal policy,

818
00:45:01,960 --> 00:45:06,319
Speaker 1: is it tax reform, is it de regulation? I would

819
00:45:06,320 --> 00:45:09,200
Speaker 1: say yes to all of the above. As as you know,

820
00:45:09,360 --> 00:45:13,680
Speaker 1: we've started down a multiple track system. UM. First of all,

821
00:45:13,800 --> 00:45:16,400
Speaker 1: deregulation because that's one of the easier things that we

822
00:45:16,480 --> 00:45:18,880
Speaker 1: can attack. Some of the de regulation we can do

823
00:45:19,000 --> 00:45:21,960
Speaker 1: through personnel. By putting new personnel into some of the jobs.

824
00:45:22,320 --> 00:45:24,800
Speaker 1: We can deregulate some of our our markets and some

825
00:45:24,960 --> 00:45:27,600
Speaker 1: of our industries, and we're doing that. You've seen some

826
00:45:27,719 --> 00:45:30,200
Speaker 1: of those those things come through. You've seen him come

827
00:45:30,280 --> 00:45:32,640
Speaker 1: through through executive orders, and you've seen him come through

828
00:45:32,680 --> 00:45:36,000
Speaker 1: by some of the agencies. We're also working on tax reform.

829
00:45:36,080 --> 00:45:39,000
Speaker 1: We think tax reform will have a very big impact

830
00:45:39,160 --> 00:45:41,680
Speaker 1: on job creation. And you can also see the President.

831
00:45:41,760 --> 00:45:44,359
Speaker 1: He's doing this every day, meeting with corporate leaders around

832
00:45:44,400 --> 00:45:47,680
Speaker 1: the world, having them um commit to bringing jobs back

833
00:45:47,719 --> 00:45:50,120
Speaker 1: to America. As we bring more and more jobs back

834
00:45:50,160 --> 00:45:54,560
Speaker 1: to America, we will continue to increase the job opportunities.

835
00:45:54,840 --> 00:45:57,400
Speaker 1: We also need to go through retraining and I think

836
00:45:57,440 --> 00:45:59,560
Speaker 1: you've seen the President and I think you've seen Ivanka

837
00:45:59,600 --> 00:46:02,279
Speaker 1: Trump's and a lot of time talking about retraining our

838
00:46:02,400 --> 00:46:06,520
Speaker 1: labor force and creating a more well rounded labor force

839
00:46:06,600 --> 00:46:08,759
Speaker 1: that can fill the jobs that we have today. We

840
00:46:08,840 --> 00:46:10,719
Speaker 1: have a lot of jobs out there that need to

841
00:46:10,760 --> 00:46:13,120
Speaker 1: be filled. We just don't have the right applicant pool.

842
00:46:13,400 --> 00:46:15,960
Speaker 1: And training our applicant pool to fill those jobs will

843
00:46:16,000 --> 00:46:17,839
Speaker 1: be very exciting for us, and we think we can

844
00:46:17,880 --> 00:46:19,680
Speaker 1: do that, and we think we can do that very quickly.

845
00:46:19,880 --> 00:46:21,839
Speaker 1: Green you started with deregulation, and a couple of months

846
00:46:21,840 --> 00:46:23,680
Speaker 1: ago when we talked to you, you were just initiating,

847
00:46:23,760 --> 00:46:27,400
Speaker 1: under a President's executive order, an initiative to really review

848
00:46:27,600 --> 00:46:30,200
Speaker 1: what could be deregulated, particularly with a view to getting

849
00:46:30,200 --> 00:46:33,200
Speaker 1: more lending going to smaller and medium sized business. Can

850
00:46:33,239 --> 00:46:35,239
Speaker 1: you give us an update on where that stands and

851
00:46:35,360 --> 00:46:39,879
Speaker 1: what things we can expect and when well, we're we're

852
00:46:39,920 --> 00:46:41,920
Speaker 1: starting down that path. You know, we've we've been in

853
00:46:42,080 --> 00:46:46,359
Speaker 1: office uh for for just over ten weeks now, uh

854
00:46:46,600 --> 00:46:49,279
Speaker 1: and we're we're you're starting to see a bunch of

855
00:46:49,360 --> 00:46:51,680
Speaker 1: our personnel appointments. You're gonna see a bunch more in

856
00:46:51,719 --> 00:46:53,880
Speaker 1: the next few weeks here as we go through the

857
00:46:53,920 --> 00:46:57,879
Speaker 1: process of appointing people into the agency's we've got three

858
00:46:57,920 --> 00:47:00,200
Speaker 1: Fed governors. To a point, I think you're gonna some

859
00:47:00,280 --> 00:47:02,520
Speaker 1: appointments come out in the Fed governorships in the in

860
00:47:02,560 --> 00:47:06,799
Speaker 1: the very new future. We're very excited about those appointments

861
00:47:07,160 --> 00:47:09,040
Speaker 1: that will help us, which with a lot of the

862
00:47:09,160 --> 00:47:12,520
Speaker 1: deregulation of the banks. We've talked about lending small and

863
00:47:12,600 --> 00:47:15,400
Speaker 1: medium sized lending and that's important to us. We know

864
00:47:15,920 --> 00:47:18,879
Speaker 1: that small and medium sized businesses are the real job

865
00:47:19,000 --> 00:47:21,680
Speaker 1: creators in this country, and we need to get banks

866
00:47:21,800 --> 00:47:24,279
Speaker 1: lending the small and medium sized companies. We've met with

867
00:47:24,320 --> 00:47:27,239
Speaker 1: a bunch of banks, both small medium sized banks in

868
00:47:27,560 --> 00:47:30,640
Speaker 1: this country and they're talking about to us about the

869
00:47:30,719 --> 00:47:33,760
Speaker 1: issues they have with lending and getting small and medium

870
00:47:33,800 --> 00:47:37,560
Speaker 1: sized banks lending. Again. Um to to to grow the

871
00:47:37,600 --> 00:47:39,959
Speaker 1: economy and grow jobs is very important to us. Gary.

872
00:47:40,000 --> 00:47:41,960
Speaker 1: Within the last four hours, there have been reports here

873
00:47:42,320 --> 00:47:45,120
Speaker 1: that you are open to the possibility of reinstituting some

874
00:47:45,320 --> 00:47:48,480
Speaker 1: form of glass Stiegel. Could you connect that sort of

875
00:47:48,600 --> 00:47:53,279
Speaker 1: reregulation up with what you just said, so remember the

876
00:47:53,560 --> 00:47:58,160
Speaker 1: President during his campaign talked about a modern twenty one

877
00:47:58,280 --> 00:48:01,880
Speaker 1: century glass. Stiegel was asked about that at the Senate

878
00:48:01,920 --> 00:48:05,399
Speaker 1: Banking Committee and a bipartisan committee meeting, and I talked

879
00:48:05,440 --> 00:48:08,040
Speaker 1: about the President's policy that he ran on about having

880
00:48:08,160 --> 00:48:12,080
Speaker 1: a new modern twenty one century glass. Degle. Does that

881
00:48:12,280 --> 00:48:15,160
Speaker 1: help get more lending being done to small and medium

882
00:48:15,200 --> 00:48:19,440
Speaker 1: sized companies? What would that accomplish? Look, we would like

883
00:48:19,600 --> 00:48:23,160
Speaker 1: to get banks lending again. What what we're worried about

884
00:48:23,480 --> 00:48:26,759
Speaker 1: is this one size fits all regulation. So right now

885
00:48:26,880 --> 00:48:30,040
Speaker 1: we've got this massive set of regulation that's built to

886
00:48:30,120 --> 00:48:33,200
Speaker 1: regulate all banks as all their is their equal. If

887
00:48:33,239 --> 00:48:37,160
Speaker 1: we come up with a century modern glass, diego, we

888
00:48:37,280 --> 00:48:41,080
Speaker 1: may be able to tailor regulation for different aspects of

889
00:48:41,120 --> 00:48:45,040
Speaker 1: the financial markets and different aspects of the financial institutions,

890
00:48:45,120 --> 00:48:48,799
Speaker 1: and that would allow banks to get lending more aggressively

891
00:48:48,840 --> 00:48:51,640
Speaker 1: too small and medium sized companies. Okay, very Finally, you

892
00:48:51,719 --> 00:48:54,040
Speaker 1: also mentioned tax reform. Give us a sense of where

893
00:48:54,040 --> 00:48:56,279
Speaker 1: we are on tax reform. Yesterday we interviewed Senator John

894
00:48:56,320 --> 00:48:59,280
Speaker 1: Soon and asked him whether they might meet the deadline

895
00:48:59,320 --> 00:49:02,480
Speaker 1: of August that Stevennuchan, your Treasury Secretary, laid out, are

896
00:49:02,520 --> 00:49:04,359
Speaker 1: you gonna make that when would you expect we're gonna

897
00:49:04,400 --> 00:49:08,600
Speaker 1: have meaningful tax reforms through the Congress. So we're spending

898
00:49:08,800 --> 00:49:11,680
Speaker 1: enormous amount of time on taxes right now. It's UH.

899
00:49:12,120 --> 00:49:14,680
Speaker 1: I would say it's probably my number one agenda item

900
00:49:14,800 --> 00:49:17,480
Speaker 1: right now is taxes. We are coming up with the

901
00:49:17,560 --> 00:49:22,240
Speaker 1: cohesive plan. We are gonna launch with one cohesive plan together.

902
00:49:23,120 --> 00:49:25,600
Speaker 1: I don't know if it's August or not. Getting it

903
00:49:25,719 --> 00:49:28,400
Speaker 1: done well and getting it done right is more important

904
00:49:28,400 --> 00:49:31,319
Speaker 1: than getting it done soon. We are committed to get

905
00:49:31,360 --> 00:49:33,640
Speaker 1: it done this calendar year. So this calendar year is

906
00:49:33,800 --> 00:49:36,640
Speaker 1: very important to us. UH, and you will see much

907
00:49:36,680 --> 00:49:39,960
Speaker 1: more out of us on taxes when the Congress comes

908
00:49:40,000 --> 00:49:42,480
Speaker 1: back from the recess. We have a lot of important

909
00:49:42,480 --> 00:49:53,320
Speaker 1: meetings scheduled. Thanks for listening to the Bloomberg Surveillance podcast.

910
00:49:53,719 --> 00:49:58,800
Speaker 1: Subscribe and listen to interviews on iTunes, SoundCloud, or whichever

911
00:49:58,960 --> 00:50:02,600
Speaker 1: podcast platform room you prefer. I'm out on Twitter at

912
00:50:02,760 --> 00:50:07,000
Speaker 1: Tom Keene. David Gura is at David Gura. Before the podcast,

913
00:50:07,200 --> 00:50:23,400
Speaker 1: you can always catch us worldwide. I'm Bloomberg Radio, brought

914
00:50:23,480 --> 00:50:27,040
Speaker 1: you by Bank of America Mary Lynch, dedicated to bringing

915
00:50:27,120 --> 00:50:30,800
Speaker 1: our clients insights and solutions to meet the challenges of

916
00:50:30,880 --> 00:50:35,840
Speaker 1: a transforming world. That's the power of global connections. Mary Lynch, Pierce,

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Speaker 1: Fenner and Smith Incorporated, Member s I p C