1 00:00:05,120 --> 00:00:08,480 Speaker 1: This is the Bloomberg Surveillance Podcast. I'm Tom Keene, along 2 00:00:08,520 --> 00:00:12,360 Speaker 1: with Jonathan Farrow and Lisa Abramowitz. Join us each day 3 00:00:12,400 --> 00:00:16,840 Speaker 1: for insight from the best and economics, geopolitics, finance and investment. 4 00:00:17,280 --> 00:00:22,079 Speaker 1: Subscribe to Bloomberg Surveillance on demand on Apple, Spotify and 5 00:00:22,320 --> 00:00:26,600 Speaker 1: anywhere you get your podcasts, and always on Bloomberg dot Com, 6 00:00:26,640 --> 00:00:30,760 Speaker 1: the Bloomberg Terminal, and the Bloomberg Business App. William Dudley 7 00:00:30,880 --> 00:00:34,080 Speaker 1: joining us nowt the former New York Fed president and 8 00:00:34,120 --> 00:00:37,680 Speaker 1: Bloomberg opinion columnists Phil I got eight ways to go here. 9 00:00:37,720 --> 00:00:40,760 Speaker 1: I'll stand script on inflation and McKee. I'm sure we'll 10 00:00:40,760 --> 00:00:45,600 Speaker 1: have smarter things to say. Five percent is flat out 11 00:00:45,800 --> 00:00:52,320 Speaker 1: not acceptable. Everyone understands that what inflation rate is that 12 00:00:52,560 --> 00:00:55,000 Speaker 1: moment where Bill Dudley relaxes. 13 00:00:56,600 --> 00:00:58,960 Speaker 2: I think when the Fed gets the inflation rate down 14 00:00:59,000 --> 00:01:02,160 Speaker 2: into the twesday and there's more slack in the labor 15 00:01:02,200 --> 00:01:05,040 Speaker 2: market and wages are rising more like three to four 16 00:01:05,080 --> 00:01:07,560 Speaker 2: percent rather than five to six percent, which. 17 00:01:07,360 --> 00:01:08,080 Speaker 3: They're doing now. 18 00:01:08,680 --> 00:01:10,920 Speaker 2: The Fed is making some progress on the inflation front, 19 00:01:10,920 --> 00:01:13,000 Speaker 2: but they haven't made much progress yet on the labor 20 00:01:13,040 --> 00:01:15,760 Speaker 2: market and on the wage trend. So it's hard to 21 00:01:15,760 --> 00:01:17,919 Speaker 2: see inflation going all the way back to two percent 22 00:01:17,959 --> 00:01:20,679 Speaker 2: where the labor market's tight and wages as high, and. 23 00:01:20,600 --> 00:01:26,120 Speaker 1: Your studies at Berkeley, is it necessary to have unemployment 24 00:01:26,240 --> 00:01:29,679 Speaker 1: go up to bring inflation down? Why can't we just 25 00:01:29,800 --> 00:01:34,959 Speaker 1: move the inflation needle the disinflation needle and keep America employed. 26 00:01:36,240 --> 00:01:37,520 Speaker 3: Well, that'd be the ideal outcome. 27 00:01:37,520 --> 00:01:39,160 Speaker 2: It'd be great if we could operate at a three 28 00:01:39,200 --> 00:01:42,600 Speaker 2: point four percent unemployment rate with two percent inflation. 29 00:01:43,160 --> 00:01:46,920 Speaker 3: But historically that suggests that it's not happened in the past. 30 00:01:46,959 --> 00:01:49,560 Speaker 2: The libor market at that level of tightness generates wage 31 00:01:49,560 --> 00:01:52,320 Speaker 2: gains that are inconsistent with two percent inflation, and the 32 00:01:52,320 --> 00:01:54,480 Speaker 2: Federal Reserve doesn't think that's going to happen. The fether Reserve, 33 00:01:54,640 --> 00:01:56,840 Speaker 2: if you look at their last summary of economic projections, 34 00:01:57,080 --> 00:01:59,480 Speaker 2: expects that they're going to need to push the unemployment 35 00:01:59,520 --> 00:02:01,760 Speaker 2: rate up above four and a half percent to be 36 00:02:01,800 --> 00:02:04,000 Speaker 2: successful and bringing inflation down. So they need to push 37 00:02:04,000 --> 00:02:07,760 Speaker 2: the unemployer rate by more than a full percentage point in. 38 00:02:07,720 --> 00:02:09,520 Speaker 3: Their minds to be successful. And I think that's a 39 00:02:09,560 --> 00:02:10,720 Speaker 3: reasonable forecast. 40 00:02:11,280 --> 00:02:11,520 Speaker 1: Bill. 41 00:02:11,560 --> 00:02:18,760 Speaker 4: It's Mike switching to that Jobs report data. The calculations 42 00:02:18,760 --> 00:02:20,239 Speaker 4: people are making to get to that four and a 43 00:02:20,240 --> 00:02:22,160 Speaker 4: half percent by the end of the year, which the 44 00:02:22,200 --> 00:02:24,639 Speaker 4: Fed has forecast, we need all of a sudden to 45 00:02:24,720 --> 00:02:28,160 Speaker 4: start losing tens of thousands, if not hundreds of thousands 46 00:02:28,200 --> 00:02:30,760 Speaker 4: of jobs a month. Do you see any prospect of that? 47 00:02:32,080 --> 00:02:34,960 Speaker 2: Well, I think it just reiterates the tension between what 48 00:02:35,040 --> 00:02:36,799 Speaker 2: the Fed thinks in terms of how long I have 49 00:02:36,880 --> 00:02:38,880 Speaker 2: to keep greats high versus what the market thinks. 50 00:02:39,280 --> 00:02:40,679 Speaker 3: The FED thinks, this is all going to be a 51 00:02:40,760 --> 00:02:41,640 Speaker 3: very slow process. 52 00:02:41,639 --> 00:02:43,359 Speaker 2: It's going to take many, many months, and I think 53 00:02:43,360 --> 00:02:45,400 Speaker 2: when we get the next summer of economic projections from 54 00:02:45,440 --> 00:02:48,480 Speaker 2: the Fed in June, you'll probably see them being less 55 00:02:49,080 --> 00:02:52,160 Speaker 2: optimistic about how fast they can bring inflation back down 56 00:02:52,200 --> 00:02:55,400 Speaker 2: to two percent, and probably show a slower rise in. 57 00:02:55,440 --> 00:02:57,000 Speaker 3: The unemployer rate. You're absolutely right. 58 00:02:57,600 --> 00:03:00,840 Speaker 2: The labor market's still pretty darn strong, and the Fed 59 00:03:00,919 --> 00:03:01,760 Speaker 2: really hasn't. 60 00:03:01,520 --> 00:03:04,280 Speaker 3: Gotten the progress that they've wanted on that score. They 61 00:03:04,280 --> 00:03:05,079 Speaker 3: need payroll. 62 00:03:04,800 --> 00:03:07,840 Speaker 2: Gains of fifty thousand or less to push the unemployment 63 00:03:07,919 --> 00:03:10,600 Speaker 2: rate up by a meaningful amount, and they haven't gotten 64 00:03:10,600 --> 00:03:11,800 Speaker 2: anything like that yet. 65 00:03:12,600 --> 00:03:16,080 Speaker 4: Is there any way they can accurately forecast what's going 66 00:03:16,120 --> 00:03:19,720 Speaker 4: to happen to wages. Given this post pandemic, weird kind 67 00:03:19,760 --> 00:03:23,079 Speaker 4: of labor market that we have, I. 68 00:03:23,040 --> 00:03:25,960 Speaker 2: Think that they can see what's happening through a broad 69 00:03:26,000 --> 00:03:28,519 Speaker 2: set of wage indicators, and what's happening is not really 70 00:03:28,720 --> 00:03:31,480 Speaker 2: unusual relative to what you would expect, even the tightness 71 00:03:31,480 --> 00:03:34,200 Speaker 2: of the layer market. If you look at the Jolts report, 72 00:03:34,280 --> 00:03:36,680 Speaker 2: the job openings, the labor to turnaments report, that suggests 73 00:03:36,680 --> 00:03:39,960 Speaker 2: that the layer market has eased a little bit, but 74 00:03:40,000 --> 00:03:42,720 Speaker 2: that ratio of unfilled jobs to unemployed workers is still 75 00:03:42,840 --> 00:03:45,840 Speaker 2: really high. Pure Pola said that he needs to get 76 00:03:45,840 --> 00:03:47,960 Speaker 2: that ratio down to about one to one. Right now, 77 00:03:48,240 --> 00:03:49,960 Speaker 2: I think we're operating at one point six to one, 78 00:03:49,960 --> 00:03:51,800 Speaker 2: so we still have quite a bit of ways to go. 79 00:03:52,840 --> 00:03:55,040 Speaker 4: Speaking of a ways to go, which is I guess 80 00:03:55,160 --> 00:03:58,640 Speaker 4: kind of what policymakers are always going to say. Are 81 00:03:58,640 --> 00:04:02,360 Speaker 4: they there in terms of being restrictive enough or is 82 00:04:02,360 --> 00:04:05,480 Speaker 4: there anything in this data or the data that you've 83 00:04:05,520 --> 00:04:09,320 Speaker 4: seen so far since the last meeting that would suggest 84 00:04:09,560 --> 00:04:11,280 Speaker 4: that maybe they need to do more. 85 00:04:12,960 --> 00:04:15,280 Speaker 2: They think they're restrictive enough, And I think one reason 86 00:04:15,320 --> 00:04:17,240 Speaker 2: why they think they're restrictive enough is we're going to 87 00:04:17,240 --> 00:04:20,120 Speaker 2: see some credit constraints from the banking sector because of 88 00:04:20,120 --> 00:04:23,520 Speaker 2: the turmo we've seen in the banking area, So they're 89 00:04:23,520 --> 00:04:26,000 Speaker 2: thinking that credit conditions are going to be tighter as 90 00:04:26,040 --> 00:04:28,919 Speaker 2: banks pull back a bit. One area, though, where you 91 00:04:28,960 --> 00:04:30,760 Speaker 2: have to be a little bit concerned is the housing sector, 92 00:04:30,800 --> 00:04:32,880 Speaker 2: which is really the most interest rate sense of the 93 00:04:32,960 --> 00:04:35,840 Speaker 2: sector of the comic seems to be bottoming out. So 94 00:04:36,160 --> 00:04:39,080 Speaker 2: if entre policy is a really tight and the housing 95 00:04:39,080 --> 00:04:41,760 Speaker 2: market is start to recover again, and that does raise 96 00:04:41,760 --> 00:04:43,719 Speaker 2: a question of whether the FED is sufficiently tight. 97 00:04:44,160 --> 00:04:46,719 Speaker 1: Bill Dudley, I want to go to your latest essay, 98 00:04:46,880 --> 00:04:49,159 Speaker 1: which has a single sentence in it which is not 99 00:04:49,240 --> 00:04:52,080 Speaker 1: an inflammatory, but I think shocking to a lot of people. 100 00:04:52,600 --> 00:04:55,600 Speaker 1: And I'm going to suggest that Bill Dudley, like Stephen Roach, 101 00:04:55,600 --> 00:04:57,960 Speaker 1: who worked at another shop on Wall Street years ago, 102 00:04:58,640 --> 00:05:01,800 Speaker 1: you people are looking for a new FED mandate around 103 00:05:01,839 --> 00:05:07,000 Speaker 1: FED stability. Are you a financial stability Are you advocating 104 00:05:07,440 --> 00:05:11,839 Speaker 1: a three part FED with the responsibility of inflation dynamics, 105 00:05:12,360 --> 00:05:16,120 Speaker 1: jobs dynamics, and find financial stability dynamics. 106 00:05:17,480 --> 00:05:20,320 Speaker 2: Well, I guess I would put it is financial stability 107 00:05:20,360 --> 00:05:21,880 Speaker 2: is a necessary condition for. 108 00:05:21,839 --> 00:05:23,080 Speaker 3: An effective monitoring policy. 109 00:05:23,080 --> 00:05:25,120 Speaker 2: If you don't have financial stability, you lose control of 110 00:05:25,160 --> 00:05:28,520 Speaker 2: monitary policy. So as part of your monetary policy mandate, 111 00:05:28,600 --> 00:05:31,680 Speaker 2: you have to have a great close focus on financial stability. 112 00:05:32,000 --> 00:05:34,240 Speaker 3: And the fact is the FED missed what was going 113 00:05:34,279 --> 00:05:35,520 Speaker 3: to happen in the banking sector. 114 00:05:35,520 --> 00:05:38,120 Speaker 2: If you look back at the November Financial Stability Report, 115 00:05:38,400 --> 00:05:41,680 Speaker 2: there was nothing about the potential funding risk of regional banks. 116 00:05:41,880 --> 00:05:45,719 Speaker 2: There was nothing about the large marked to market losses 117 00:05:45,720 --> 00:05:48,240 Speaker 2: on their balance sheet. There was nothing about the risk 118 00:05:48,320 --> 00:05:52,760 Speaker 2: that uninsured depositors might leave. So the FED really, you know, 119 00:05:52,800 --> 00:05:55,320 Speaker 2: didn't capture that. And I get the FED a lot 120 00:05:55,360 --> 00:05:58,719 Speaker 2: of credit for the report that they published just recently 121 00:05:58,760 --> 00:06:01,160 Speaker 2: on what went wrong with Lacon Valley Bank. I think 122 00:06:01,360 --> 00:06:05,799 Speaker 2: they do recognize their supervisory failures, but that's not sufficient. 123 00:06:06,400 --> 00:06:09,360 Speaker 2: Entre policy also contributed to what happened because the FED 124 00:06:09,400 --> 00:06:12,400 Speaker 2: basically made interest rate very low for a very long time. 125 00:06:12,800 --> 00:06:15,880 Speaker 3: They flooded the banking system with deposits. Some banks took 126 00:06:15,920 --> 00:06:18,760 Speaker 3: those as posits and bought long datad assets that didn't 127 00:06:18,760 --> 00:06:19,479 Speaker 3: work out for them. 128 00:06:19,520 --> 00:06:22,479 Speaker 2: So the FED reserves entre policy did contribute to the 129 00:06:22,480 --> 00:06:24,240 Speaker 2: problems that we've seen in the banking sector. 130 00:06:24,400 --> 00:06:26,840 Speaker 1: Yeah, I looked Mike McKee at this and the dovetail here, 131 00:06:26,880 --> 00:06:30,160 Speaker 1: and it hearkens back to Stephen wrote screaming about a 132 00:06:30,200 --> 00:06:33,080 Speaker 1: new FED with a new mandate within a modern economy, 133 00:06:33,520 --> 00:06:35,800 Speaker 1: and whether it was Roach at Morgan Stanley or Bill 134 00:06:35,880 --> 00:06:39,320 Speaker 1: Dudley at Goldman Sachs years ago, this was the dovetail 135 00:06:39,480 --> 00:06:44,040 Speaker 1: of market economics into the academic discussion that Chairman Powell 136 00:06:44,120 --> 00:06:46,520 Speaker 1: has to face every day, and here we are looking 137 00:06:46,560 --> 00:06:47,760 Speaker 1: at it again. Yeah. 138 00:06:47,839 --> 00:06:50,760 Speaker 4: Bell raises a question of what do you think the 139 00:06:50,839 --> 00:06:54,680 Speaker 4: Fed's reaction function is now given that the new monetary 140 00:06:54,680 --> 00:06:56,760 Speaker 4: policy framework doesn't apply at the moment. 141 00:06:58,080 --> 00:07:00,279 Speaker 5: I think their reaction function is that they want to 142 00:07:00,279 --> 00:07:02,320 Speaker 5: They're going to keep rates at this level or maybe 143 00:07:02,320 --> 00:07:05,640 Speaker 5: a little even a little bit higher until they seekings 144 00:07:05,640 --> 00:07:07,520 Speaker 5: that they're confident that inflation is going to get back 145 00:07:07,520 --> 00:07:08,120 Speaker 5: to two percent. 146 00:07:08,560 --> 00:07:10,400 Speaker 3: And to be confident that inflation is going to get 147 00:07:10,440 --> 00:07:10,920 Speaker 3: back to two. 148 00:07:10,840 --> 00:07:13,720 Speaker 2: Percent, they need to see more softness in the market 149 00:07:14,080 --> 00:07:16,800 Speaker 2: reduction and wage inflation, and. 150 00:07:16,920 --> 00:07:18,960 Speaker 3: More progress on services sector inflation. 151 00:07:19,360 --> 00:07:20,400 Speaker 1: Bill Dudley hotsyus. 152 00:07:20,440 --> 00:07:20,600 Speaker 6: Some M. 153 00:07:20,680 --> 00:07:23,160 Speaker 1: Calvy are online too, and they just want to gustimate 154 00:07:23,200 --> 00:07:25,560 Speaker 1: to you, when do we get under three percent inflation? 155 00:07:26,040 --> 00:07:29,920 Speaker 1: Give us your market economic analysis today? Of the timeline 156 00:07:29,920 --> 00:07:31,520 Speaker 1: to three percent. When do we see it? 157 00:07:32,320 --> 00:07:34,440 Speaker 2: I think I probably see it by before the end 158 00:07:34,440 --> 00:07:37,080 Speaker 2: of the year because housing inflation is going to come 159 00:07:37,120 --> 00:07:41,360 Speaker 2: down pretty dramatically. We've seen that the housing inflation in 160 00:07:41,400 --> 00:07:45,320 Speaker 2: the CPI and in the pc deflator lags a lot 161 00:07:45,440 --> 00:07:48,800 Speaker 2: behind what's actually happening in housing, So that's going to 162 00:07:48,800 --> 00:07:50,640 Speaker 2: start to turn down pretty sharply, I think in the 163 00:07:50,680 --> 00:07:52,080 Speaker 2: second half of the year, and that will help us 164 00:07:52,120 --> 00:07:52,960 Speaker 2: on headline inflation. 165 00:07:53,240 --> 00:07:55,560 Speaker 1: Doctor Doddley, thank you so much for joining us writing 166 00:07:55,560 --> 00:07:59,680 Speaker 1: for Bloomberg Opinions. Superb assay, thought provoking essay for all 167 00:08:00,200 --> 00:08:03,880 Speaker 1: commercial banking here from Bill Dudley on the latest banking 168 00:08:03,920 --> 00:08:19,040 Speaker 1: crisis of financial stability. He is the ultimate bottoms up investor, 169 00:08:19,120 --> 00:08:23,200 Speaker 1: Mario Gabelly cut his teeth on machinery things, as Gartman says, 170 00:08:23,240 --> 00:08:26,280 Speaker 1: following your foot and hurt you. He is a cell 171 00:08:26,360 --> 00:08:29,760 Speaker 1: side analyst who's had a claim with a broader portfolio 172 00:08:29,880 --> 00:08:33,800 Speaker 1: over the years in entertainment and such. Mario, I've got. 173 00:08:33,559 --> 00:08:35,160 Speaker 3: To go to you know. 174 00:08:35,280 --> 00:08:37,559 Speaker 1: I couldn't do it as a diehard Red Sox fan. 175 00:08:37,600 --> 00:08:40,480 Speaker 1: I'm not gonna go along the Atlanta braves. But this 176 00:08:40,559 --> 00:08:44,000 Speaker 1: is textbook Gibelly. It was twenty something now it's on 177 00:08:44,080 --> 00:08:47,480 Speaker 1: the edge of forty. Explain why the Atlanta Braves are 178 00:08:47,520 --> 00:08:49,959 Speaker 1: gonna win the Gabelly World Series this year. 179 00:08:51,720 --> 00:08:54,880 Speaker 7: You know, I'm sorry about the Red Sox losing last night. 180 00:08:55,120 --> 00:08:58,520 Speaker 7: The Braves are doing well. Independent of that. The pitch 181 00:08:58,600 --> 00:09:04,080 Speaker 7: clock is having an impact on baseball by shortening it. Well, 182 00:09:04,559 --> 00:09:08,040 Speaker 7: we'll get the results over time. But in addition to that, 183 00:09:08,120 --> 00:09:11,440 Speaker 7: you have other reasons for attendance, You have other reasons 184 00:09:11,520 --> 00:09:16,520 Speaker 7: for revenues. There's about sixty two million shares of B 185 00:09:16,760 --> 00:09:19,000 Speaker 7: A t R A and B A t R at 186 00:09:19,120 --> 00:09:23,720 Speaker 7: the lower voting stock. Our clients own a significant piece 187 00:09:23,760 --> 00:09:28,040 Speaker 7: of the voting stock, and so as a result of that, 188 00:09:28,080 --> 00:09:31,720 Speaker 7: we are obviously cheerleaders for the Atlanta Braves. And we 189 00:09:31,880 --> 00:09:34,880 Speaker 7: think between Battery Park, that is the area in which 190 00:09:34,880 --> 00:09:37,680 Speaker 7: the stadium is in right, the value of the franchise. 191 00:09:37,840 --> 00:09:39,680 Speaker 7: I think you're going to get it, you know, forty 192 00:09:39,679 --> 00:09:41,920 Speaker 7: five to fifty five dollars a share somewhere in an 193 00:09:41,920 --> 00:09:45,080 Speaker 7: extra vos. That's it. It's a And if you don't 194 00:09:45,080 --> 00:09:48,200 Speaker 7: want to own it because you got emotional dynamics such 195 00:09:48,240 --> 00:09:51,320 Speaker 7: as life, that's your portfolio. But give it that everybody 196 00:09:51,400 --> 00:09:53,560 Speaker 7: listening should get one hundred shares from others day. For 197 00:09:53,760 --> 00:09:56,640 Speaker 7: someone to that they like Mario. 198 00:09:56,480 --> 00:09:59,120 Speaker 1: Gabelli on the Atlanta Braves, putting me in the Gabelli, 199 00:09:59,240 --> 00:10:02,320 Speaker 1: it'll double time out. Chare is well, there will be 200 00:10:02,400 --> 00:10:05,160 Speaker 1: reports on Disney, Mario, I think of you and Gordon 201 00:10:05,200 --> 00:10:08,640 Speaker 1: Crawford and Capitol Guardian Trust as being people that have 202 00:10:08,720 --> 00:10:13,359 Speaker 1: followed as entertainment idiocy. Were you surprised at the streaming 203 00:10:13,480 --> 00:10:18,119 Speaker 1: nonprofit in is Disney the mother of all Gabelli values? 204 00:10:20,160 --> 00:10:22,160 Speaker 7: Well, you've got to look at the amount of money 205 00:10:22,160 --> 00:10:26,559 Speaker 7: being spent on content by the companies. As an example, 206 00:10:26,640 --> 00:10:29,840 Speaker 7: Disney will probably be twenty eight to thirty billion. Netflix 207 00:10:29,960 --> 00:10:32,320 Speaker 7: is trying hard to get up to thirteen or fourteen 208 00:10:32,400 --> 00:10:36,080 Speaker 7: or fifteen billion. Paramounts is higher than that. Then you 209 00:10:36,200 --> 00:10:39,640 Speaker 7: have Apple trying to catch up. But Apple cumulively maybe 210 00:10:39,640 --> 00:10:44,680 Speaker 7: for the last five years, has spent thirteen billion said 211 00:10:44,679 --> 00:10:48,120 Speaker 7: they don't have any content. So where and how do 212 00:10:48,200 --> 00:10:51,200 Speaker 7: you find? You know, I love Lucy, and I love 213 00:10:51,280 --> 00:10:55,359 Speaker 7: Tom Keene, and I love Lisa. Those kind of contents 214 00:10:55,440 --> 00:10:58,640 Speaker 7: are buried in there and they come back. And for 215 00:10:58,720 --> 00:11:01,960 Speaker 7: example of Full Life with Jimmy Stewart. Because of the 216 00:11:02,000 --> 00:11:04,160 Speaker 7: bank run, people are going back and looking at that. 217 00:11:04,679 --> 00:11:08,719 Speaker 7: So how important is the embedded value? What is when 218 00:11:08,760 --> 00:11:11,559 Speaker 7: you do a theatrical box office. You had a forty 219 00:11:11,559 --> 00:11:16,400 Speaker 7: two billion dollar business, but the theater operators get forty 220 00:11:16,400 --> 00:11:19,360 Speaker 7: percent of that or higher. So now you go direct 221 00:11:19,360 --> 00:11:24,520 Speaker 7: to streaming. And unfortunately, because of the regulatory organizations, the 222 00:11:24,640 --> 00:11:27,440 Speaker 7: companies like AT and T and Verizon and T Mobile 223 00:11:27,520 --> 00:11:30,640 Speaker 7: don't get paid for people using the highways on a 224 00:11:30,679 --> 00:11:33,840 Speaker 7: super speed. I go over to George Washington Bridge and 225 00:11:34,080 --> 00:11:37,240 Speaker 7: I pay less than a Class A truck. So Tom, 226 00:11:37,480 --> 00:11:39,960 Speaker 7: from Disney's point of view, yes, you've got a learning curve, 227 00:11:40,520 --> 00:11:43,720 Speaker 7: You've got some dynamic short term you want to go global. 228 00:11:44,240 --> 00:11:46,480 Speaker 7: You know we can't be so the US has only 229 00:11:46,480 --> 00:11:48,400 Speaker 7: got three hundred and fifty million people. The rest of 230 00:11:48,440 --> 00:11:50,000 Speaker 7: the world has seven billion. 231 00:11:49,920 --> 00:11:55,559 Speaker 8: More plus Mari, are you still enthusiastic about Paramount? Do 232 00:11:55,640 --> 00:11:59,319 Speaker 8: you still think that Apple's going to buy them? 233 00:12:00,600 --> 00:12:04,000 Speaker 7: My own reaction is that whatever you have, Barb barersk 234 00:12:04,160 --> 00:12:07,680 Speaker 7: doing a great job running the business. You have good content. 235 00:12:07,800 --> 00:12:11,720 Speaker 7: They're obviously making the tough decisions to give them financial flexibility. 236 00:12:11,920 --> 00:12:14,520 Speaker 7: The Federal Trade Commission turned down an ability for them 237 00:12:14,559 --> 00:12:17,120 Speaker 7: to monetize Simon and Schuster to what they're going to do. 238 00:12:17,440 --> 00:12:20,200 Speaker 7: They're going to do beet They're going to try to 239 00:12:20,360 --> 00:12:22,880 Speaker 7: raise some capital there. But you know, from my point 240 00:12:22,920 --> 00:12:24,959 Speaker 7: of view, a year or two from now, they have 241 00:12:25,080 --> 00:12:28,880 Speaker 7: to sell our spin, which they've done before. They're very good. 242 00:12:28,880 --> 00:12:30,920 Speaker 7: For example, nobody appauded to them when they bought Pluto 243 00:12:31,000 --> 00:12:34,400 Speaker 7: for as New Yorkers would say, buckets, and they basically 244 00:12:34,440 --> 00:12:37,040 Speaker 7: have done a great job on that. Now, independent of that, 245 00:12:37,080 --> 00:12:39,640 Speaker 7: without getting into too much detail, you know, they were 246 00:12:39,640 --> 00:12:42,160 Speaker 7: spending six hundred million dollars a year on cash dividends. 247 00:12:42,400 --> 00:12:45,280 Speaker 7: That's going to be down to you know, twenty cents 248 00:12:45,280 --> 00:12:48,760 Speaker 7: time six fifty do you know a significant amount of less. 249 00:12:48,960 --> 00:12:52,640 Speaker 7: So over the next couple of years, put the foundations 250 00:12:52,679 --> 00:12:56,559 Speaker 7: back in place, accelerate the growth, and execute, and that's 251 00:12:56,600 --> 00:12:58,920 Speaker 7: what they're going to do. And then you ask the 252 00:12:59,000 --> 00:13:02,280 Speaker 7: simple question, Yeah, if you've got a stock selling at 253 00:13:02,320 --> 00:13:05,360 Speaker 7: thirty which is now nineteen, let's call it thirty, and 254 00:13:05,440 --> 00:13:08,560 Speaker 7: you basically multiply that by six hundred and fifty million shares, 255 00:13:08,559 --> 00:13:11,760 Speaker 7: you're talking about a twenty eive billion dollar equity value 256 00:13:11,760 --> 00:13:13,800 Speaker 7: and then you got debt will probably be down to 257 00:13:13,800 --> 00:13:16,000 Speaker 7: eight billion if they do these sale of these assets 258 00:13:16,040 --> 00:13:18,679 Speaker 7: and keep the care flow. So you're talking about a 259 00:13:18,760 --> 00:13:22,400 Speaker 7: tiny little morsel. So if Sherry, who owns thirty of 260 00:13:22,440 --> 00:13:25,400 Speaker 7: the forty million voting shares, decides that you know, hey, 261 00:13:25,800 --> 00:13:29,240 Speaker 7: you know, Apple wants to pay me you know, X 262 00:13:29,320 --> 00:13:32,800 Speaker 7: dollars and it's the minimus for them, and they don't 263 00:13:32,840 --> 00:13:35,240 Speaker 7: have the broadcast stations anymore because they're spin out of 264 00:13:35,240 --> 00:13:38,240 Speaker 7: the process of spending. You know, I love making takes 265 00:13:38,280 --> 00:13:40,120 Speaker 7: place in a variety of ways. 266 00:13:40,760 --> 00:13:43,880 Speaker 8: So Mario, on a broader level, you did just get 267 00:13:43,880 --> 00:13:48,120 Speaker 8: back from Omaha where you were at the Berkshire Hathaway 268 00:13:48,280 --> 00:13:52,199 Speaker 8: Annual Meeting shareholder meeting. Have you ever heard Warren Buffett 269 00:13:52,280 --> 00:13:56,280 Speaker 8: this negative, this gloomy, this pessimistic, unstocked. Did you take 270 00:13:56,320 --> 00:13:58,720 Speaker 8: a message from that that you obviously. 271 00:13:58,640 --> 00:14:02,960 Speaker 7: I disagree with you complete. Warren Buffett basically pounded away 272 00:14:03,080 --> 00:14:06,400 Speaker 7: at the idea that if you believe in the virtues 273 00:14:06,480 --> 00:14:09,280 Speaker 7: of the American system that allowed him for eighty years 274 00:14:09,480 --> 00:14:11,800 Speaker 7: when he first started investing at the age of thirteen 275 00:14:12,400 --> 00:14:15,960 Speaker 7: to make a lot of money, that tailwind continues to flourish. 276 00:14:16,120 --> 00:14:20,240 Speaker 7: So is he practical. Yeah, I mean, you know, he's 277 00:14:20,360 --> 00:14:23,200 Speaker 7: very patient and so as a result of that, he's 278 00:14:23,240 --> 00:14:25,480 Speaker 7: got his cash, he's waiting for it. All of us 279 00:14:25,520 --> 00:14:27,560 Speaker 7: are going to focus on a thirteen f that's coming 280 00:14:27,560 --> 00:14:30,720 Speaker 7: out by Monday and see what he bought, what he's 281 00:14:30,760 --> 00:14:34,200 Speaker 7: selling so wild. You know, he's got smart people working 282 00:14:34,240 --> 00:14:36,880 Speaker 7: for him and Greg he first announced, Greg Abel now 283 00:14:36,920 --> 00:14:40,000 Speaker 7: taking over and a jeep Jane continue to run the 284 00:14:40,040 --> 00:14:43,320 Speaker 7: insurance business. So your management session has been identified. 285 00:14:43,560 --> 00:14:46,440 Speaker 1: Everyone wants to know the value trapped. It's a banks 286 00:14:46,480 --> 00:14:48,600 Speaker 1: and your research note. You say to me that you 287 00:14:48,640 --> 00:14:51,800 Speaker 1: want to buy a Southern bank for acquisition. My theme 288 00:14:51,840 --> 00:14:54,480 Speaker 1: for the year is the great zombie roll up? Are 289 00:14:54,520 --> 00:14:58,320 Speaker 1: the smaller banks one collective zombie? And are we going 290 00:14:58,400 --> 00:15:01,880 Speaker 1: to see a massive bank roll up led by banks 291 00:15:01,960 --> 00:15:02,640 Speaker 1: in the South. 292 00:15:04,520 --> 00:15:07,240 Speaker 7: You know, look, you got all of the right dynamics. 293 00:15:07,280 --> 00:15:09,360 Speaker 7: We have a lot of banks. But you know, let's 294 00:15:09,400 --> 00:15:11,560 Speaker 7: flash back. You and I have been doing this for 295 00:15:11,680 --> 00:15:14,680 Speaker 7: a few years. You had a crisis in nineteen sixty 296 00:15:14,800 --> 00:15:17,840 Speaker 7: seven eight nine where the banks lend money to oil 297 00:15:17,880 --> 00:15:20,320 Speaker 7: tankers or whatever they were. In the seventies, you had 298 00:15:20,360 --> 00:15:23,160 Speaker 7: the Hirshta Bank had a whole bunch kind of og bus. 299 00:15:23,320 --> 00:15:27,640 Speaker 7: You had a hold and the eighties you started one 300 00:15:27,680 --> 00:15:30,600 Speaker 7: thousand banks. Tom went bust in the savings a loan 301 00:15:30,680 --> 00:15:33,760 Speaker 7: association crisis because of that, the account's put in a 302 00:15:33,800 --> 00:15:37,120 Speaker 7: rule called hold to maturity, don't amortize, And then you 303 00:15:37,160 --> 00:15:39,120 Speaker 7: had no interest rates for an extended period of time. 304 00:15:39,520 --> 00:15:42,160 Speaker 7: So somebody says, I got a deposit, I'm going to 305 00:15:42,240 --> 00:15:44,520 Speaker 7: lend it long. It costs me no money. The basic 306 00:15:44,600 --> 00:15:47,880 Speaker 7: bank problem is you borrow short and lend long. You 307 00:15:48,000 --> 00:15:51,600 Speaker 7: got a problem independent of that. You still need to 308 00:15:51,680 --> 00:15:54,560 Speaker 7: have that service for the American public, the American economy. 309 00:15:54,920 --> 00:15:57,480 Speaker 7: And I will get over this notion of how bad 310 00:15:57,800 --> 00:16:01,480 Speaker 7: the office will construct. That's it, Murra. 311 00:16:01,520 --> 00:16:03,960 Speaker 1: We got one Yankees fan. He's down in Florida, and 312 00:16:03,960 --> 00:16:06,440 Speaker 1: this Yankees fan emails it and says, the breadth of 313 00:16:06,440 --> 00:16:10,200 Speaker 1: the market is important. Broad Based rallies have the potential 314 00:16:10,240 --> 00:16:15,480 Speaker 1: to continue, while narrowing rallies are prone to a failure. 315 00:16:15,800 --> 00:16:18,800 Speaker 1: Quoting the great Bob Ferrell and Mari Lynch years ago, 316 00:16:19,400 --> 00:16:21,920 Speaker 1: if you ever seen anything as narrow as what we 317 00:16:21,960 --> 00:16:25,360 Speaker 1: see with Apple Computer and four other stocks, and what 318 00:16:25,400 --> 00:16:26,240 Speaker 1: do we do about it? 319 00:16:27,080 --> 00:16:30,560 Speaker 7: Well, you got a lot of dynamics. If I was 320 00:16:30,640 --> 00:16:34,600 Speaker 7: growing up tom playing World of Warcraft and I'm now 321 00:16:34,640 --> 00:16:37,840 Speaker 7: playing Diablo for on my machines, a very quick I 322 00:16:37,920 --> 00:16:42,360 Speaker 7: learned I want instant results. I want to play momentum clearly, 323 00:16:43,320 --> 00:16:45,360 Speaker 7: you know. And then I get on robin Hood and 324 00:16:45,400 --> 00:16:49,240 Speaker 7: then you get quants, Momo, Algos and Aiole coming together 325 00:16:49,320 --> 00:16:53,360 Speaker 7: to do trading the markets of the markets, okay, the 326 00:16:53,480 --> 00:16:56,800 Speaker 7: values of the values over the next right now. For example, 327 00:16:56,880 --> 00:16:59,840 Speaker 7: even if GDP is down two percent real and inflations, 328 00:17:00,680 --> 00:17:02,760 Speaker 7: you're going to get nominal revenues going in three and 329 00:17:02,800 --> 00:17:05,160 Speaker 7: that's a large basket for you. What you talked about 330 00:17:05,160 --> 00:17:08,000 Speaker 7: before in your show. If company is having growth margins SDNA, 331 00:17:08,359 --> 00:17:11,240 Speaker 7: they're learning how to deal with manufacturing reshoring to the 332 00:17:11,359 --> 00:17:14,439 Speaker 7: United States. Tizan is out. That is the just in 333 00:17:14,480 --> 00:17:17,840 Speaker 7: time inventory. Now you bring it closer and you get 334 00:17:17,840 --> 00:17:20,920 Speaker 7: more efficient, and you do AI and you start doing 335 00:17:20,960 --> 00:17:25,600 Speaker 7: a lot of automation, and you pray for immigration because 336 00:17:25,600 --> 00:17:28,000 Speaker 7: that's where the long term growth of this country is 337 00:17:28,000 --> 00:17:28,520 Speaker 7: coming from. 338 00:17:28,920 --> 00:17:32,159 Speaker 8: Mario, we've talked about how we are seeing an increasing 339 00:17:32,240 --> 00:17:34,639 Speaker 8: number of people go back to stock picking from just 340 00:17:34,680 --> 00:17:37,760 Speaker 8: simply indexing. Do you notice that in the day to day, 341 00:17:37,840 --> 00:17:40,760 Speaker 8: do you notice more people interested in the trade that 342 00:17:40,840 --> 00:17:43,760 Speaker 8: you've always practiced and you continue doing so now, But. 343 00:17:43,800 --> 00:17:45,880 Speaker 7: Go back one giant step. I come from a culture 344 00:17:45,880 --> 00:17:49,000 Speaker 7: where we had Graham Dodd, Roger Murray, Bruce Greenwall and 345 00:17:49,040 --> 00:17:53,600 Speaker 7: now Tolla Santo's teaching value investing. How do you do research? 346 00:17:54,280 --> 00:17:57,040 Speaker 7: What is the value of an enterprise? Who is going 347 00:17:57,119 --> 00:17:59,640 Speaker 7: to buy it is? What a would private equity pay? 348 00:17:59,680 --> 00:18:02,240 Speaker 7: What is the capital structure that they can tolerate? What 349 00:18:02,359 --> 00:18:05,520 Speaker 7: is the tax structure? How good is it? Big? Then 350 00:18:05,560 --> 00:18:09,600 Speaker 7: you cut through all the crap right, How good is 351 00:18:09,640 --> 00:18:13,080 Speaker 7: the business? How good is the management? The values after 352 00:18:13,240 --> 00:18:15,640 Speaker 7: buying of that? Are they well below what you think 353 00:18:15,680 --> 00:18:19,760 Speaker 7: the intrinsic value is? And therefore that discount you know 354 00:18:19,880 --> 00:18:23,000 Speaker 7: we'll go out and that over time you're going to do. Okay. 355 00:18:23,119 --> 00:18:26,040 Speaker 7: I think that the market tom in forty five years 356 00:18:26,040 --> 00:18:28,840 Speaker 7: will be one million under Dow. So you know that's 357 00:18:28,880 --> 00:18:30,160 Speaker 7: seven eight percent returns. 358 00:18:31,040 --> 00:18:33,920 Speaker 1: You're showing your cards. You're showing your Morning Side Heights cards. 359 00:18:33,960 --> 00:18:36,520 Speaker 1: Here in the bottom line is Columbia Business School, and 360 00:18:36,680 --> 00:18:38,800 Speaker 1: you mentioned grab Dott and Coddle, and a guy named 361 00:18:38,840 --> 00:18:42,080 Speaker 1: Buffet went there years ago as well. Do the young 362 00:18:42,240 --> 00:18:46,840 Speaker 1: Turks of Columbia Business School believe in the traditional Warren 363 00:18:46,920 --> 00:18:48,880 Speaker 1: Buffett securities analysis. 364 00:18:50,200 --> 00:18:52,879 Speaker 7: There's a lot of cultures that come in in quotes 365 00:18:52,920 --> 00:18:55,840 Speaker 7: in the financial area. You want to integrate analytics. 366 00:18:56,119 --> 00:18:56,399 Speaker 1: Tom. 367 00:18:56,440 --> 00:18:58,280 Speaker 7: If you and I were around two hundred years ago, 368 00:18:58,280 --> 00:19:00,760 Speaker 7: what we would be talking about today on this was 369 00:19:00,760 --> 00:19:03,600 Speaker 7: that the Rothschild's got a pigeon to tell them who 370 00:19:03,640 --> 00:19:06,040 Speaker 7: won the battle at Waterloo, and that they went down 371 00:19:06,080 --> 00:19:08,400 Speaker 7: and did something on the stock market. We can talk 372 00:19:08,400 --> 00:19:10,280 Speaker 7: about that at other time. Then you used to go 373 00:19:10,359 --> 00:19:13,359 Speaker 7: to have Warren Buffer go down in Washington, DC to 374 00:19:13,400 --> 00:19:17,199 Speaker 7: microfish Data or Graham then you I did it at 375 00:19:17,200 --> 00:19:20,080 Speaker 7: the New York Stock you saints today. I gave a 376 00:19:20,119 --> 00:19:23,679 Speaker 7: speech and I said chat GPT. I got my grandson 377 00:19:23,760 --> 00:19:28,800 Speaker 7: to do it and it was a brilliant speech. I 378 00:19:29,320 --> 00:19:30,800 Speaker 7: and it took him five seconds. 379 00:19:30,880 --> 00:19:31,040 Speaker 9: Yeah. 380 00:19:31,560 --> 00:19:34,520 Speaker 7: So the question is how quickly can we gather data? 381 00:19:34,680 --> 00:19:37,159 Speaker 7: How quickly can we use it? But then when you 382 00:19:37,200 --> 00:19:39,760 Speaker 7: get you got to be with some practical judgment has 383 00:19:39,800 --> 00:19:40,320 Speaker 7: to go in the mix. 384 00:19:40,480 --> 00:19:43,760 Speaker 1: Murr. One more question. Speak to the people out there 385 00:19:43,760 --> 00:19:46,760 Speaker 1: that want to be in the market, but they're scared stiff. 386 00:19:47,119 --> 00:19:49,480 Speaker 1: How do you play? How do you participate. 387 00:19:50,400 --> 00:19:52,560 Speaker 7: Well, first of all, you got to do what Buffett says, 388 00:19:52,560 --> 00:19:55,560 Speaker 7: which is patients long term, don't worry about the short 389 00:19:55,640 --> 00:19:58,000 Speaker 7: term dynamics. You for you know, if I own a 390 00:19:58,040 --> 00:20:00,880 Speaker 7: farm out in Iowa or in the Bronx, so let's 391 00:20:00,920 --> 00:20:02,679 Speaker 7: by farm into Brox. I'm not going to wake up 392 00:20:02,720 --> 00:20:05,040 Speaker 7: every day and figure out what the prices are. I'm 393 00:20:05,040 --> 00:20:06,399 Speaker 7: going to look at it and say what are my 394 00:20:06,480 --> 00:20:08,840 Speaker 7: cash flows and what are my predictability and what can 395 00:20:08,840 --> 00:20:11,520 Speaker 7: I harvest it? Same thing with good businesses. If you 396 00:20:11,600 --> 00:20:13,840 Speaker 7: buy a good bunch of business and you know whether 397 00:20:14,119 --> 00:20:19,800 Speaker 7: I have like the Tagna taxtrawn trade and television my te's, 398 00:20:20,160 --> 00:20:21,919 Speaker 7: you know, we can talk about these things. The stocks 399 00:20:21,920 --> 00:20:24,040 Speaker 7: will go down, they'll go up, but you know, five 400 00:20:24,080 --> 00:20:27,000 Speaker 7: years from now we're to make pers This. 401 00:20:26,960 --> 00:20:29,359 Speaker 1: Has been brilliant. Mario Gabelli, thank you so much for 402 00:20:29,440 --> 00:20:42,760 Speaker 1: particalarly there on banks in the South as well, joining 403 00:20:42,800 --> 00:20:46,800 Speaker 1: us now French Hill of Arkansas. He is a Republican. 404 00:20:47,200 --> 00:20:50,480 Speaker 1: Give me the morality here at Congressman the Hill. It 405 00:20:50,680 --> 00:20:54,480 Speaker 1: is a serious, serious issue no one's talking about. Is 406 00:20:54,520 --> 00:20:57,600 Speaker 1: it immoral to have a debt and deficit in the 407 00:20:57,680 --> 00:21:00,960 Speaker 1: United States? I think it's well. 408 00:21:00,960 --> 00:21:02,720 Speaker 10: First of all, good morning to both of you. I 409 00:21:02,720 --> 00:21:05,080 Speaker 10: missed Bible study this morning, so that was a great 410 00:21:05,400 --> 00:21:08,600 Speaker 10: top of the show reminder. And let me say that 411 00:21:09,280 --> 00:21:12,640 Speaker 10: it is immoral to have a debt and a deficit 412 00:21:12,760 --> 00:21:15,760 Speaker 10: that are not controlled, and that's what we have now. 413 00:21:15,800 --> 00:21:18,320 Speaker 10: We're running a forecast of over one and a half 414 00:21:18,400 --> 00:21:21,680 Speaker 10: trillion dollar deficits a year for the next ten years 415 00:21:21,680 --> 00:21:24,879 Speaker 10: in the President's budget. That's the part that's unsustainable. You 416 00:21:24,920 --> 00:21:29,040 Speaker 10: could argue that's immoral because it's substantially larger than we've 417 00:21:29,119 --> 00:21:31,360 Speaker 10: run in the past, and it doesn't show the kind 418 00:21:31,400 --> 00:21:33,600 Speaker 10: of discipline we should have to go back to a 419 00:21:33,640 --> 00:21:37,119 Speaker 10: balanced budget and not be adding to the debt indiscriminately. 420 00:21:37,400 --> 00:21:40,520 Speaker 1: Congressman, there is a photograph of you and Bush the 421 00:21:40,600 --> 00:21:43,760 Speaker 1: first in your youth, and that was back when we 422 00:21:43,800 --> 00:21:47,320 Speaker 1: had commissions I think of green Span and Social Security 423 00:21:47,359 --> 00:21:51,359 Speaker 1: that actually got something done. I'm still in disbelief that 424 00:21:51,440 --> 00:21:54,720 Speaker 1: Simpson Bulls went down in flames. Why can't we be 425 00:21:54,920 --> 00:21:58,720 Speaker 1: like any good democracy, get a commission to find an 426 00:21:58,760 --> 00:22:02,200 Speaker 1: equal ground to do something about our debt and deficit. 427 00:22:03,520 --> 00:22:06,080 Speaker 10: Well, Tom, you're right, and I do support that idea. 428 00:22:06,080 --> 00:22:08,080 Speaker 10: I thought that was one of the more effective things 429 00:22:08,080 --> 00:22:10,119 Speaker 10: in the first term of President Reagan when he was 430 00:22:10,160 --> 00:22:14,320 Speaker 10: cutting taxes and rebuilding defense. He also puts social Security 431 00:22:14,359 --> 00:22:17,359 Speaker 10: on a stable ground by the Greenspan Commission, which had 432 00:22:17,400 --> 00:22:19,240 Speaker 10: an up or down vote on how to do that. 433 00:22:19,840 --> 00:22:22,600 Speaker 10: I would support a commission like that to tackle mandatory 434 00:22:22,640 --> 00:22:26,000 Speaker 10: spending programs like Social Security, Medicare. Make sure they have 435 00:22:26,080 --> 00:22:29,480 Speaker 10: the stability and funding for the next generation. Because they're 436 00:22:29,520 --> 00:22:33,480 Speaker 10: two thirds of our spending every year, they drive the deficit, 437 00:22:33,480 --> 00:22:35,160 Speaker 10: which in turn obviously drives the debt. 438 00:22:35,280 --> 00:22:39,000 Speaker 8: Congressman, there's a really important conversation to be had about 439 00:22:39,000 --> 00:22:43,000 Speaker 8: what's sustainable and good finance for this nation. There's another 440 00:22:43,080 --> 00:22:45,480 Speaker 8: question around the manner to have it, whether we should 441 00:22:45,520 --> 00:22:48,440 Speaker 8: be having it on a brinks edge, holding the US's 442 00:22:48,480 --> 00:22:51,959 Speaker 8: credit rating hostage. Is this really the appropriate way to 443 00:22:51,960 --> 00:22:54,320 Speaker 8: be discussing this at a time when both parties have 444 00:22:54,480 --> 00:22:55,440 Speaker 8: increased the deficit? 445 00:22:56,480 --> 00:22:56,680 Speaker 1: Right? 446 00:22:56,960 --> 00:22:59,560 Speaker 10: Well, I think that's why on February one, Kevin McCarthy 447 00:22:59,600 --> 00:23:02,639 Speaker 10: met with the President and said, let's meet and have 448 00:23:02,720 --> 00:23:05,479 Speaker 10: a sensible and responsible way to raise the debt ceiling 449 00:23:05,520 --> 00:23:09,040 Speaker 10: and get spending under control. Following the pandemic. They had 450 00:23:09,080 --> 00:23:12,320 Speaker 10: a meeting the President promise to follow up, and one 451 00:23:12,359 --> 00:23:15,159 Speaker 10: hundred days have gone by, and what's happened in the 452 00:23:15,160 --> 00:23:18,080 Speaker 10: interim is only one branch of government, one portion of 453 00:23:18,080 --> 00:23:20,920 Speaker 10: a branch of government has taken action, and that's the House, 454 00:23:21,000 --> 00:23:24,280 Speaker 10: under Kevin McCarthy's leadership, to raise the debt ceiling and 455 00:23:24,440 --> 00:23:28,560 Speaker 10: propose some spending controls and regulatory policies that would make 456 00:23:28,640 --> 00:23:31,639 Speaker 10: us have a better economy and a faster growing economy. 457 00:23:31,720 --> 00:23:34,680 Speaker 8: With all due respect on their former President Trump's administration, 458 00:23:35,080 --> 00:23:38,000 Speaker 8: the deficit rose by seven point eight trillion dollars. It 459 00:23:38,040 --> 00:23:41,159 Speaker 8: brought it to World War two type financing conditions, and 460 00:23:41,240 --> 00:23:43,280 Speaker 8: yet we didn't have a question over the debt ceiling. 461 00:23:43,280 --> 00:23:45,280 Speaker 8: There wasn't this sort of pushback. We weren't brought to 462 00:23:45,280 --> 00:23:47,960 Speaker 8: the brink. Why is it so different now that we 463 00:23:48,000 --> 00:23:51,320 Speaker 8: can't have a discussion more clearly even though we have 464 00:23:51,440 --> 00:23:52,960 Speaker 8: the same kind of debt situation. 465 00:23:54,320 --> 00:23:56,199 Speaker 10: Well, I don't think that's true. First of all, the 466 00:23:56,200 --> 00:23:59,040 Speaker 10: bulk of debt spending was due to bipartisan spending to 467 00:23:59,040 --> 00:24:03,600 Speaker 10: fight the pandemic, over five trillion dollars. Shocking situation, shocking 468 00:24:03,640 --> 00:24:07,359 Speaker 10: reaction by the Congress. If we knew what we know today, 469 00:24:07,440 --> 00:24:09,720 Speaker 10: back in March of twenty twenty, we probably wouldn't have 470 00:24:09,720 --> 00:24:12,120 Speaker 10: spent that much money. But with that said, we did 471 00:24:12,160 --> 00:24:15,600 Speaker 10: have a debt ceiling fight in twenty nineteen, and it 472 00:24:15,720 --> 00:24:19,080 Speaker 10: was President Trump was forced to negotiate with Speaker Pelosi 473 00:24:19,359 --> 00:24:22,480 Speaker 10: because he was not in control of the situation, the 474 00:24:22,520 --> 00:24:26,800 Speaker 10: precise same situation that President Biden finds himself now. And 475 00:24:26,840 --> 00:24:29,480 Speaker 10: that's why Kevin McCarthy went to the President on February 476 00:24:29,520 --> 00:24:32,400 Speaker 10: first and said, let's do a sensible and responsible deal. 477 00:24:32,720 --> 00:24:35,600 Speaker 8: Comrasce Spannet, what would your response be to President Trump 478 00:24:35,840 --> 00:24:39,040 Speaker 8: if he did invoke the fourteenth Amendment to keep paying interest, 479 00:24:39,200 --> 00:24:42,400 Speaker 8: to keep paying principle on the US debt, even if 480 00:24:42,400 --> 00:24:45,080 Speaker 8: we do go over that deadline with respect to this 481 00:24:45,119 --> 00:24:45,639 Speaker 8: debt ceiling. 482 00:24:46,680 --> 00:24:50,080 Speaker 10: Well, Secretary Yellen doesn't believe that's a practical activity. I 483 00:24:50,160 --> 00:24:53,160 Speaker 10: think it's sort of a gimmick. I understand the fourteenth Amendment. 484 00:24:53,480 --> 00:24:56,040 Speaker 10: But we've also got legislation in the House that we've 485 00:24:56,119 --> 00:24:59,919 Speaker 10: passed to continue spending the principal interest payments on the 486 00:25:00,040 --> 00:25:03,359 Speaker 10: treasury and other mandatory spending programs as well. That was 487 00:25:03,400 --> 00:25:06,280 Speaker 10: passed by the House Ways and Means Committee several weeks ago. 488 00:25:07,480 --> 00:25:12,840 Speaker 1: French Hill, September of twenty fifteen. Mister Baynor fell on 489 00:25:12,920 --> 00:25:17,440 Speaker 1: a sword and exited stage right, or maybe exited stage left, 490 00:25:17,440 --> 00:25:19,920 Speaker 1: and that was the problem with the Tea Party at 491 00:25:19,960 --> 00:25:23,880 Speaker 1: the time. Explain to me the challenges Kevin McCarthy has 492 00:25:23,920 --> 00:25:26,240 Speaker 1: here not to do another John Bayner. 493 00:25:27,920 --> 00:25:32,240 Speaker 10: Well, look, I heard this morning earlier that people were 494 00:25:32,240 --> 00:25:35,560 Speaker 10: concerned Kevin McCarthy only has a one person can move 495 00:25:35,680 --> 00:25:39,000 Speaker 10: make a motion to vacate the chair. Well, every speaker 496 00:25:39,000 --> 00:25:41,800 Speaker 10: of the House except for Nancy Pelosi, has faced the 497 00:25:41,840 --> 00:25:45,879 Speaker 10: same procedural motion. It's not a new thing, and it 498 00:25:45,920 --> 00:25:48,720 Speaker 10: can still be a motion that's tabled by two hundred 499 00:25:48,760 --> 00:25:51,639 Speaker 10: and eighteen Republicans. So I don't view that as something 500 00:25:51,640 --> 00:25:55,320 Speaker 10: that Kevin McCarthy's remotely concerned about. What he's concerned about 501 00:25:55,359 --> 00:25:58,480 Speaker 10: is a responsible and sensible way of raising the dead 502 00:25:58,520 --> 00:26:01,600 Speaker 10: ceiling and curtailing spend and going back to our pre 503 00:26:01,680 --> 00:26:02,960 Speaker 10: pandemic priorities. 504 00:26:03,520 --> 00:26:06,359 Speaker 1: Congressman Hill, what do you need from Secretary Yellen? What 505 00:26:06,440 --> 00:26:12,879 Speaker 1: leadership can Janet Yellen provide in the coming days? Excellent question, Tom. 506 00:26:12,960 --> 00:26:15,359 Speaker 10: Janet Yellen could step in right now and say that 507 00:26:15,400 --> 00:26:19,720 Speaker 10: she'll be happy to work with Speaker McCarthy and develop 508 00:26:19,800 --> 00:26:23,560 Speaker 10: a responsible and sensible deal to raise the debt ceiling 509 00:26:24,000 --> 00:26:26,800 Speaker 10: and curtail a spending in the right way. And I 510 00:26:26,800 --> 00:26:29,320 Speaker 10: think it would pass overwhelmingly in the House and Senate, 511 00:26:29,359 --> 00:26:32,840 Speaker 10: and President Biden could sign it into law well ahead 512 00:26:32,960 --> 00:26:36,560 Speaker 10: of any deadline that she has set. And I would say, Look, 513 00:26:36,600 --> 00:26:39,879 Speaker 10: that's precisely what President Trump did with Speaker Pelosi. He 514 00:26:39,920 --> 00:26:44,080 Speaker 10: asked Secretary Steve Manuchin, then the Treasury Secretary, to get 515 00:26:44,080 --> 00:26:46,640 Speaker 10: that deal done, and that's what happened back in twenty nineteen. 516 00:26:46,760 --> 00:26:49,080 Speaker 1: Congressman, thank you so much. The Republicans you've met to 517 00:26:49,880 --> 00:26:56,560 Speaker 1: thank you with us today in a terrific brief. He 518 00:26:56,640 --> 00:26:59,639 Speaker 1: is in London, where he holds Corn's chief global equity 519 00:26:59,640 --> 00:27:03,120 Speaker 1: stretch just a Gold and Sacks. Peter Appeneimer has decades 520 00:27:03,119 --> 00:27:08,200 Speaker 1: of experience of extracting ourselves from the worries of the moment. Peter, 521 00:27:08,400 --> 00:27:10,240 Speaker 1: thank you so much for joining us, and I love 522 00:27:10,240 --> 00:27:13,800 Speaker 1: what you're saying your research note about finding neutrality, a 523 00:27:13,920 --> 00:27:17,840 Speaker 1: neutral view, What do you do in the stock market 524 00:27:17,920 --> 00:27:19,920 Speaker 1: when you have a neutral view? 525 00:27:21,800 --> 00:27:25,000 Speaker 9: Well, Tom, we've had that view really through the last year. 526 00:27:25,040 --> 00:27:26,040 Speaker 3: We've been calling the. 527 00:27:25,960 --> 00:27:30,320 Speaker 9: Market environment fat and flats, relatively flat returns at the 528 00:27:30,359 --> 00:27:35,280 Speaker 9: index level, with quite wide trading bands as the market 529 00:27:35,960 --> 00:27:41,280 Speaker 9: assesses at different points the relative risk between recession and inflation. 530 00:27:41,920 --> 00:27:44,000 Speaker 9: And I think we're at the top of that band 531 00:27:44,040 --> 00:27:46,280 Speaker 9: at the moment. And what we've been arguing is that 532 00:27:46,359 --> 00:27:48,280 Speaker 9: within that so you're going to get quite a lot 533 00:27:48,280 --> 00:27:52,160 Speaker 9: of our for opportunities. Generally, we've been pitching it as 534 00:27:54,040 --> 00:27:56,840 Speaker 9: a balance between some deep value where we think the 535 00:27:56,920 --> 00:28:00,040 Speaker 9: risks of valuations are very low, and quality growth g 536 00:28:01,040 --> 00:28:04,960 Speaker 9: and the combination we think is really where investors should 537 00:28:04,960 --> 00:28:07,720 Speaker 9: be in a relatively flat index environment. 538 00:28:08,040 --> 00:28:10,560 Speaker 8: Peter, over the past ten years, everyone was a macro trader, 539 00:28:10,720 --> 00:28:13,040 Speaker 8: and in the past six months everyone's become a microtrader. 540 00:28:13,240 --> 00:28:14,960 Speaker 8: And I go to Bank of America saying, for the 541 00:28:15,000 --> 00:28:17,200 Speaker 8: first time since the two thousand and eight crisis, there 542 00:28:17,240 --> 00:28:20,600 Speaker 8: is evidence of a stock pickers market, of individuals going 543 00:28:20,600 --> 00:28:23,760 Speaker 8: into stocks over ETFs. Is this something that you think 544 00:28:23,920 --> 00:28:26,280 Speaker 8: is going to be persistent, that we are actually shifting 545 00:28:26,320 --> 00:28:29,639 Speaker 8: away from some of the broad indexes and really meaningfully 546 00:28:29,680 --> 00:28:31,840 Speaker 8: clients looking at specific stocks. 547 00:28:32,960 --> 00:28:33,880 Speaker 3: Yeah, I think that's right. 548 00:28:33,920 --> 00:28:36,760 Speaker 9: Look, in the last decade, really equities and all asset 549 00:28:36,800 --> 00:28:39,920 Speaker 9: classes have been dominated by one thing and one thing only, 550 00:28:39,960 --> 00:28:42,480 Speaker 9: and that's a zero interest rate world, a very low 551 00:28:42,520 --> 00:28:47,120 Speaker 9: cost of capital, and that's really driven an environment where 552 00:28:47,240 --> 00:28:49,880 Speaker 9: valuations of assets have gone up. That's been a major 553 00:28:50,000 --> 00:28:53,320 Speaker 9: driver of returns which were not likely to see again 554 00:28:53,440 --> 00:28:56,760 Speaker 9: to the same degree. But it also generated environment was 555 00:28:56,920 --> 00:29:00,760 Speaker 9: very factor based. Everyone wanted growth because it benefited most 556 00:29:00,840 --> 00:29:03,480 Speaker 9: from that drop of very low cost of. 557 00:29:03,520 --> 00:29:07,000 Speaker 7: Capital, and everyone was neglecting value. 558 00:29:07,040 --> 00:29:09,360 Speaker 9: And I think it's much more nuance now you're seeing 559 00:29:09,400 --> 00:29:14,440 Speaker 9: some really good earnings coming through across different sectors of 560 00:29:14,480 --> 00:29:20,080 Speaker 9: the markets. We're also seeing different leadership geographically as well. 561 00:29:20,120 --> 00:29:22,280 Speaker 9: We've been arguing that Europe woul outform the US, and 562 00:29:22,320 --> 00:29:24,560 Speaker 9: it's been doing rather better in the last year. 563 00:29:24,600 --> 00:29:25,840 Speaker 3: I think that will continue. 564 00:29:26,000 --> 00:29:28,440 Speaker 9: So I think investors need to be a bit more nuanced, 565 00:29:28,520 --> 00:29:32,840 Speaker 9: more diversified across regions, across sectors and factors. And it 566 00:29:32,880 --> 00:29:35,840 Speaker 9: really is I think an environment where stop picking an 567 00:29:35,880 --> 00:29:40,840 Speaker 9: alpha creates a better opportunity for investors relative to just 568 00:29:40,920 --> 00:29:42,800 Speaker 9: beta an index investing. Well. 569 00:29:43,000 --> 00:29:46,480 Speaker 8: That makes sort of a concern around the fragility of 570 00:29:46,560 --> 00:29:48,400 Speaker 8: markets when there is a shock that people are not 571 00:29:48,480 --> 00:29:50,720 Speaker 8: prepared for. And I wonder, for example, today with the 572 00:29:50,800 --> 00:29:53,360 Speaker 8: CPI report, we end up with something that is much 573 00:29:53,360 --> 00:29:57,120 Speaker 8: harder than what people expected. If there is that vulnerability 574 00:29:57,240 --> 00:29:59,720 Speaker 8: even amid all of this sort of malaise around the 575 00:29:59,760 --> 00:30:02,600 Speaker 8: mac or a trade to suddenly say, oh my goodness, I 576 00:30:02,640 --> 00:30:03,800 Speaker 8: need to pay attention again. 577 00:30:05,600 --> 00:30:08,400 Speaker 9: Yeah, I think, look, the macro is going to be 578 00:30:08,440 --> 00:30:11,680 Speaker 9: critically important because we're close to inflection points, and it's 579 00:30:11,720 --> 00:30:16,760 Speaker 9: always an environment where investors become particularly heightened to risks 580 00:30:16,880 --> 00:30:20,480 Speaker 9: or opportunities around margin or macro data. I think, as 581 00:30:20,520 --> 00:30:23,920 Speaker 9: you described in the introduction, we're in an environment where 582 00:30:23,920 --> 00:30:27,600 Speaker 9: inflation is still pretty sticky, well above what the central 583 00:30:27,640 --> 00:30:31,600 Speaker 9: banks really want in terms of their targets, and there 584 00:30:31,600 --> 00:30:34,360 Speaker 9: are some risks still on the downside in terms of 585 00:30:34,400 --> 00:30:37,360 Speaker 9: the economy. At the moment, I think markets are really 586 00:30:37,440 --> 00:30:41,600 Speaker 9: pricing the best possible outcome on markets, pricing rate cuts 587 00:30:41,600 --> 00:30:44,760 Speaker 9: and inflation coming down. The equity markets are pretty much 588 00:30:44,800 --> 00:30:48,600 Speaker 9: pricing a soft landing. That combination is possible, but it's 589 00:30:48,640 --> 00:30:51,960 Speaker 9: really what's priced, and I think that the margin. Our 590 00:30:52,040 --> 00:30:55,600 Speaker 9: view is that interest rate expectations need to adjust to 591 00:30:55,720 --> 00:30:58,040 Speaker 9: being higher for longer to get inflation down. 592 00:30:58,800 --> 00:31:00,840 Speaker 1: Before we get back to inflation, I want to tag 593 00:31:00,880 --> 00:31:03,920 Speaker 1: team you and Jeff Curry together, and this is on hydrocarbons. 594 00:31:04,160 --> 00:31:07,080 Speaker 1: And I look at Shell PLC obviously with a higher 595 00:31:07,120 --> 00:31:10,680 Speaker 1: dividend than what I see with Exceutomobile, Goldman Sex and 596 00:31:10,880 --> 00:31:15,200 Speaker 1: owning big oil on the continent or big oil in America. 597 00:31:15,240 --> 00:31:16,160 Speaker 1: How do you choose? 598 00:31:17,680 --> 00:31:22,120 Speaker 9: Well, We like energy and commodities generally we think that 599 00:31:22,360 --> 00:31:25,280 Speaker 9: prices will rise from a fundamental perspective, as Jeff has 600 00:31:25,280 --> 00:31:28,960 Speaker 9: been arguing. But also these sectors are very very cash generative. 601 00:31:29,000 --> 00:31:32,400 Speaker 9: They're paying dividends and they got free cash flow yields, 602 00:31:32,640 --> 00:31:35,560 Speaker 9: you know, in the mid teens, particularly in Europe, so 603 00:31:36,160 --> 00:31:40,360 Speaker 9: energy and resources were overweight in Europe. We like resources 604 00:31:40,400 --> 00:31:43,840 Speaker 9: in particular in the US. But these areas of the 605 00:31:43,880 --> 00:31:47,000 Speaker 9: market we think have very low valuations. They don't have 606 00:31:47,080 --> 00:31:49,880 Speaker 9: a lot of downside risk in terms of valuation, and 607 00:31:49,920 --> 00:31:53,280 Speaker 9: they've still got an opportunity to I think, accrete returns 608 00:31:53,280 --> 00:31:57,080 Speaker 9: and compound returns for investors over time in a flat market. 609 00:31:57,400 --> 00:31:59,200 Speaker 1: Peter, if you and Jeff Curry are over in New 610 00:31:59,280 --> 00:32:02,080 Speaker 1: York City or were there, or were there in London, whatever, 611 00:32:02,120 --> 00:32:03,880 Speaker 1: we'd love to get both of you on desk with 612 00:32:03,960 --> 00:32:05,640 Speaker 1: us at the same time. That would be just a 613 00:32:05,640 --> 00:32:09,240 Speaker 1: really great moment. Mister Oppenheimer's with Golden Sex. 614 00:32:13,120 --> 00:32:16,480 Speaker 8: Joining us now, Henry to Trace, economic policy research director 615 00:32:16,840 --> 00:32:20,920 Speaker 8: at Veda Partners, really appreciate you joining us, Henrietta, your 616 00:32:21,040 --> 00:32:24,640 Speaker 8: take on the non action, the non development of yesterday's 617 00:32:24,720 --> 00:32:27,440 Speaker 8: meeting and whether any of these meetings will really gild 618 00:32:27,520 --> 00:32:31,360 Speaker 8: any fruit until someone said yesterday the eleventh hour, the 619 00:32:31,480 --> 00:32:33,480 Speaker 8: fifty ninth minute, and the fifty ninth second. 620 00:32:35,040 --> 00:32:36,240 Speaker 11: Yeah, that's exactly right. 621 00:32:36,320 --> 00:32:38,800 Speaker 6: I mean, anybody who's been through this movie before knows 622 00:32:38,840 --> 00:32:41,080 Speaker 6: that they do not get anything done until they have to. 623 00:32:41,440 --> 00:32:44,880 Speaker 6: In DC, we are functionally four weeks away from June first, 624 00:32:44,920 --> 00:32:47,680 Speaker 6: which even Treasury has not been hard and fast on 625 00:32:47,760 --> 00:32:51,440 Speaker 6: the actual deadline. The House has been out of session 626 00:32:51,520 --> 00:32:54,960 Speaker 6: for about ten days since their vote a few weeks back. 627 00:32:55,360 --> 00:32:58,040 Speaker 6: So when they had the meeting yesterday, my base case 628 00:32:58,080 --> 00:33:00,640 Speaker 6: assumption and from speaking with staff, was that nothing was 629 00:33:00,680 --> 00:33:02,120 Speaker 6: going to come a bit. There was going to be 630 00:33:02,360 --> 00:33:04,840 Speaker 6: press availability, they were going to shake hands, get a 631 00:33:04,840 --> 00:33:07,680 Speaker 6: lot of jobs in which we obviously saw from Speaker 632 00:33:07,760 --> 00:33:10,160 Speaker 6: McCarthy sometimes a little bit more aggressively than anybody would 633 00:33:10,160 --> 00:33:13,160 Speaker 6: have anticipated in an ordinary year. But he's really like 634 00:33:13,200 --> 00:33:15,960 Speaker 6: proving what he wants to be and present as speaker, 635 00:33:16,200 --> 00:33:18,760 Speaker 6: and so this is much much more about posturing. You'll 636 00:33:18,800 --> 00:33:21,280 Speaker 6: notice that the biggest takeaway was staff is going to 637 00:33:21,280 --> 00:33:23,959 Speaker 6: get involved. Now that's all I want, as a former staffer, 638 00:33:24,040 --> 00:33:25,160 Speaker 6: is to get staff involved. 639 00:33:25,320 --> 00:33:27,720 Speaker 11: They'll start meeting today at the leadership level. 640 00:33:28,240 --> 00:33:28,720 Speaker 7: One of the. 641 00:33:28,640 --> 00:33:31,240 Speaker 6: Areas to concern I hear most is, Hey, the House 642 00:33:31,280 --> 00:33:33,200 Speaker 6: and Senate are not going to be in session at 643 00:33:33,200 --> 00:33:36,080 Speaker 6: the same time for the next consecutive three weeks. Are 644 00:33:36,080 --> 00:33:38,280 Speaker 6: you concerned? And my answer is no, I don't care 645 00:33:38,320 --> 00:33:40,920 Speaker 6: what break and file members are doing. I really only 646 00:33:40,960 --> 00:33:43,160 Speaker 6: care what staff is doing, and they will be meeting tonight. 647 00:33:43,520 --> 00:33:45,560 Speaker 6: They are free to work through the weekend. They do 648 00:33:45,640 --> 00:33:48,040 Speaker 6: not need to attend every single fundraiser back in the 649 00:33:48,080 --> 00:33:50,600 Speaker 6: district the way that members do. So there really are 650 00:33:50,960 --> 00:33:53,560 Speaker 6: three full weeks to get a resolution here. And the 651 00:33:53,600 --> 00:33:56,080 Speaker 6: way that I would phrase it, just briefly, a good 652 00:33:56,120 --> 00:33:58,840 Speaker 6: rule of thumb here is look at the thursdays for 653 00:33:58,920 --> 00:34:01,520 Speaker 6: the rest of May. Thursday of this week we start 654 00:34:01,560 --> 00:34:03,960 Speaker 6: to get action out of staff. Thursday of next week 655 00:34:04,000 --> 00:34:05,880 Speaker 6: is the earliest I would expect a Senate vote, and 656 00:34:05,920 --> 00:34:07,960 Speaker 6: then Thursday of the following week is withou would expect 657 00:34:07,960 --> 00:34:09,520 Speaker 6: a House vote, So that's plenty of time. 658 00:34:09,680 --> 00:34:12,000 Speaker 8: This is like waiting for smoke signals, right, wait for 659 00:34:12,120 --> 00:34:14,000 Speaker 8: Thursday and we can get some sort of sense of 660 00:34:14,000 --> 00:34:20,040 Speaker 8: what's going on. Yeah, Pastor ket over here this morning, Henrietta. 661 00:34:20,120 --> 00:34:23,799 Speaker 8: I'm curious about this George Santos development in how it 662 00:34:23,840 --> 00:34:27,200 Speaker 8: relates to some of the close margins that Kevin McCarthy 663 00:34:27,280 --> 00:34:30,400 Speaker 8: is working with. The New York Post is reporting the 664 00:34:30,520 --> 00:34:34,680 Speaker 8: GEO representative GOP representative George Santos is going to surrender 665 00:34:35,080 --> 00:34:38,080 Speaker 8: after the indictment that we heard about yesterday. He does 666 00:34:38,160 --> 00:34:40,640 Speaker 8: plan to turn himself in, according to this report. This 667 00:34:40,719 --> 00:34:44,319 Speaker 8: highlights that Kevin McCarthy is working with a five Republican 668 00:34:44,680 --> 00:34:47,880 Speaker 8: margin of error that he has to keep on the rails. 669 00:34:48,160 --> 00:34:50,279 Speaker 8: Does this change the equation at all in your in 670 00:34:50,320 --> 00:34:52,560 Speaker 8: your view, I mean it. 671 00:34:52,480 --> 00:34:54,120 Speaker 11: Really underscores the current equation. 672 00:34:54,239 --> 00:34:56,319 Speaker 6: This is an empty shirt that you're trotting around that 673 00:34:56,360 --> 00:34:59,279 Speaker 6: has no committee assignments and is only there to vote. 674 00:34:59,280 --> 00:35:01,160 Speaker 6: The way to Kevin mc he tells him to vote. 675 00:35:01,640 --> 00:35:03,799 Speaker 6: When we were dealing with the Limit Safe Grow Act, 676 00:35:03,840 --> 00:35:06,799 Speaker 6: initially I thought it was great when Santos came out 677 00:35:06,800 --> 00:35:08,120 Speaker 6: and said he didn't know which way he was going 678 00:35:08,200 --> 00:35:10,400 Speaker 6: to vote. He's going to vote whichever way Kevin McCarthy 679 00:35:10,400 --> 00:35:12,800 Speaker 6: tells him to vote, and that is the requirement in 680 00:35:12,920 --> 00:35:14,320 Speaker 6: order for him to stay in Congress. 681 00:35:14,360 --> 00:35:16,520 Speaker 11: So I think this just underscores how. 682 00:35:16,719 --> 00:35:18,719 Speaker 6: Razor thin as you point out the margins are for 683 00:35:18,760 --> 00:35:21,560 Speaker 6: Speaker McCarthy, that you would keep someone like towards Santas 684 00:35:21,600 --> 00:35:23,160 Speaker 6: and then that the rest of the caucus has to 685 00:35:23,200 --> 00:35:26,279 Speaker 6: explain away and that's the tricky thing for them to do. 686 00:35:27,080 --> 00:35:30,680 Speaker 1: Why can't we get to a commission? Simpson Bulls or 687 00:35:30,719 --> 00:35:34,359 Speaker 1: some flavor of that? Is it, Henrietta, you're expert at this? 688 00:35:34,600 --> 00:35:37,640 Speaker 1: Is it so fractured? We can't even get to a 689 00:35:37,680 --> 00:35:41,680 Speaker 1: commission because these clowns are afraid of the outcome of 690 00:35:41,760 --> 00:35:42,440 Speaker 1: a commission. 691 00:35:43,880 --> 00:35:44,719 Speaker 11: I mean, give it time. 692 00:35:44,800 --> 00:35:47,440 Speaker 6: Alan Simpson is an all time rock star as far 693 00:35:47,480 --> 00:35:49,680 Speaker 6: as I'm concerned. Those were great days when we had 694 00:35:49,680 --> 00:35:52,960 Speaker 6: the Simpson Bulls Commission. We even had the Super Committee 695 00:35:52,960 --> 00:35:55,040 Speaker 6: and around that time, if you'll remember that group of people. 696 00:35:55,800 --> 00:36:00,440 Speaker 6: So to get a serious answer, when I started out yesterday, 697 00:36:00,480 --> 00:36:02,320 Speaker 6: I assumed that there would not be any breakthroughs and 698 00:36:02,400 --> 00:36:05,920 Speaker 6: negotiations at the White House. So my immediate next step 699 00:36:06,000 --> 00:36:08,480 Speaker 6: was to listen for any dog whistles for a fiscal 700 00:36:08,600 --> 00:36:11,920 Speaker 6: year twenty twenty four appropriations process, discussions of the budget, 701 00:36:12,200 --> 00:36:15,920 Speaker 6: discover discussions of actual government spending in those twelve approbe spills. 702 00:36:16,280 --> 00:36:18,680 Speaker 6: That is something that I spent my time with staff 703 00:36:18,680 --> 00:36:21,640 Speaker 6: collecting thoughts on, Hey, what are the odds we kicked 704 00:36:21,640 --> 00:36:23,640 Speaker 6: the can down the road? Just get a short term 705 00:36:23,640 --> 00:36:27,400 Speaker 6: suspension going from June first to September thirtieth, which is 706 00:36:27,400 --> 00:36:29,480 Speaker 6: the end of the fifth year, and see what the 707 00:36:29,480 --> 00:36:31,840 Speaker 6: odds are and whether they're rising for that sort. 708 00:36:31,600 --> 00:36:32,840 Speaker 11: Of four month bridge. 709 00:36:32,920 --> 00:36:36,280 Speaker 6: Okay, that four months period is when you'd see Simpson 710 00:36:36,360 --> 00:36:38,160 Speaker 6: bowls or Supercommittee starts it form. 711 00:36:38,280 --> 00:36:41,320 Speaker 1: Yeah, you've teed up the can like Lucy with Charlie Brown. 712 00:36:41,400 --> 00:36:43,800 Speaker 1: I mean, I know the way this goes. What happens 713 00:36:43,800 --> 00:36:46,480 Speaker 1: the first week of October if we've move us the 714 00:36:46,560 --> 00:36:49,560 Speaker 1: can to September thirty exactly. 715 00:36:49,600 --> 00:36:51,719 Speaker 6: So this is my worst case scenario and has been 716 00:36:51,760 --> 00:36:55,040 Speaker 6: since January, this situation where we never reach a conclusion. 717 00:36:55,120 --> 00:36:57,040 Speaker 6: Why because you know, we only have four vote margin 718 00:36:57,120 --> 00:37:00,439 Speaker 6: in the House and a Democratic Senate. What you start 719 00:37:00,480 --> 00:37:02,960 Speaker 6: seeing that on the risk is that we only do 720 00:37:03,040 --> 00:37:05,959 Speaker 6: these short term punts, and this sword is hanging over 721 00:37:06,040 --> 00:37:08,360 Speaker 6: us for the next two years. That's, in my opinion, 722 00:37:08,480 --> 00:37:11,239 Speaker 6: a very bad outcome, and that could very easily pass. 723 00:37:11,280 --> 00:37:12,600 Speaker 11: It happened in twenty twenty one. 724 00:37:13,040 --> 00:37:15,200 Speaker 6: We had always the federal fiscal year ends on the 725 00:37:15,239 --> 00:37:17,120 Speaker 6: September thirtieth, but at the time we couldn't agree on 726 00:37:17,160 --> 00:37:20,319 Speaker 6: the appropriations bills either, so we passed a three month 727 00:37:20,360 --> 00:37:23,759 Speaker 6: extension of those, called a continuing resolution into December third, 728 00:37:24,120 --> 00:37:27,040 Speaker 6: and then we simultaneously bumped the debt ceiling out that 729 00:37:27,200 --> 00:37:29,719 Speaker 6: same exact period. It was a four hundred and eighty 730 00:37:29,719 --> 00:37:33,120 Speaker 6: billion dollar suspension of specifically designed to get the debt 731 00:37:33,160 --> 00:37:36,640 Speaker 6: ceiling to coincide with the CR expiration, which of course 732 00:37:36,680 --> 00:37:38,200 Speaker 6: had been punted from September. 733 00:37:38,680 --> 00:37:40,120 Speaker 11: So that's a very real risk. 734 00:37:40,480 --> 00:37:43,520 Speaker 1: Henrietta Troce, thank you so much. She is chairman of 735 00:37:43,600 --> 00:37:47,520 Speaker 1: the Alan Simpson Fan Club in Washington with Ada partners 736 00:37:47,680 --> 00:37:51,440 Speaker 1: as well. Subscribe to the Bloomberg Surveillance podcast on Apple, 737 00:37:51,600 --> 00:37:55,840 Speaker 1: Spotify and anywhere else you get your podcasts. Listen live 738 00:37:55,960 --> 00:38:00,480 Speaker 1: every weekday starting at seven am Eastern Bloomberg Dot, the 739 00:38:00,600 --> 00:38:05,120 Speaker 1: iHeartRadio app Tune In, and the Bloomberg Business app. You 740 00:38:05,160 --> 00:38:09,120 Speaker 1: can watch us live on Bloomberg Television and always on 741 00:38:09,200 --> 00:38:13,279 Speaker 1: the Bloomberg Terminal. Thanks for listening. I'm Tom Keen, and 742 00:38:13,360 --> 00:38:14,840 Speaker 1: this is Bloomberg