WEBVTT - White Supremacy Granted a Place at American Political Table, Ricks Says 0:00:09.720 --> 0:00:12.880 Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene with 0:00:13.600 --> 0:00:16.520 David Gura. Daily we bring you insight from the best 0:00:16.560 --> 0:00:22.239 of economics, finance, investment, and international relations. Find Bloomberg Surveillance 0:00:22.320 --> 0:00:27.000 on Apple Podcasts, SoundCloud, Bloomberg dot Com, and of course 0:00:27.320 --> 0:00:34.680 on the Bloomberg. We thought we could started with the 0:00:34.720 --> 0:00:38.080 equity markets. We're gonna again have an eclectic show that 0:00:38.159 --> 0:00:42.160 sporting Douglas cast joins us, who's always interest in interesting 0:00:43.120 --> 0:00:48.480 because Mr cass Uh follows the markets looking long term 0:00:48.479 --> 0:00:50.680 but also more of a short term perspective, and there 0:00:51.080 --> 0:00:55.960 he has been very uh, very uh cautious. Is I 0:00:56.000 --> 0:00:58.840 guess how I would put it, Doug, good morning. We'll 0:00:58.880 --> 0:01:00.880 say the Yankees for the X Blot because I don't 0:01:00.880 --> 0:01:03.880 want you to hang up the phone on me. If 0:01:03.880 --> 0:01:06.440 I look at the markets, have you covered your shorts? 0:01:06.520 --> 0:01:12.679 Have you reaffirmed your shorts? Essentially trade around my core 0:01:12.880 --> 0:01:17.640 short positions almost on a weekly basis. Um that said, 0:01:17.680 --> 0:01:21.479 I'm probably at my well, probably at my highest net 0:01:21.520 --> 0:01:27.280 short exposure in two or three years. Why is that dramatic? 0:01:27.480 --> 0:01:30.160 It's dramatic. Why is it? Well? I think everything in 0:01:30.200 --> 0:01:34.360 the market gets overdone um um with the S and 0:01:34.400 --> 0:01:38.360 P and even the fangs, and the SMP price rise 0:01:38.400 --> 0:01:41.920 over the last couple of years has outpaced the prosperity 0:01:41.920 --> 0:01:44.920 on main street. It's time for the markets to fall 0:01:44.920 --> 0:01:47.800 back in line with what is actually happening in the 0:01:47.840 --> 0:01:52.320 domestic economy. And how severe the decline will be can 0:01:52.360 --> 0:01:55.720 be debated, but many, like myself look at most valuation 0:01:55.800 --> 0:01:59.960 metrics that lie in the decile. We look at the 0:02:00.120 --> 0:02:04.320 historically wide difference between gap and non gap earnings, with 0:02:04.400 --> 0:02:08.280 gap at eighteen or nineteen times and nine gap non 0:02:08.320 --> 0:02:12.080 gap in excessive times. We look at the dangerously high 0:02:12.400 --> 0:02:16.799 equity cap to GDP ratio, which is warm Buffet's favorite evaluation, 0:02:16.840 --> 0:02:20.040 and we say the market is overvalued within that has 0:02:20.080 --> 0:02:22.280 been a leadership, and that we've had a number of 0:02:22.280 --> 0:02:25.760 stocks out front, and the bulls would say that frankly, 0:02:25.800 --> 0:02:27.880 there's been a real lack of leadership. How do you 0:02:27.960 --> 0:02:31.400 cut that? Do you want to acquire shares in the 0:02:31.520 --> 0:02:34.640 laggards or are they a signal of the angst to come. 0:02:36.200 --> 0:02:39.240 I tend to look at my both my longs and 0:02:39.320 --> 0:02:44.080 my shorts on the bottoms up basis um um. You 0:02:44.120 --> 0:02:46.800 know I'm showing a number of popular stocks like Amazon 0:02:47.000 --> 0:02:50.680 and Disney the ladder, whose growth rate is probably whose 0:02:50.680 --> 0:02:54.360 secular growth rate is probably under ten percent compared to 0:02:54.400 --> 0:02:59.240 eighteen percent historically at thirteen and four in consensus on 0:02:59.280 --> 0:03:02.000 the south side of Wall Street. And that's how I 0:03:02.000 --> 0:03:03.880 do my business. I don't look at and I look 0:03:03.919 --> 0:03:06.560 at I don't look at price targets. I look at probabilities, 0:03:07.240 --> 0:03:10.200 and I look at the just generally speaking, I look 0:03:10.240 --> 0:03:13.680 at the dysfunction that this organization in the White House 0:03:14.480 --> 0:03:17.320 and the animus not only between the Dems and the Republicans, 0:03:17.360 --> 0:03:21.560 but within the GOP itself. And I recognize as a guest, 0:03:22.040 --> 0:03:24.400 I think a professor at Columbia, in an early segment 0:03:24.480 --> 0:03:27.560 of yours, said, it's highly unlikely that we're going to 0:03:27.600 --> 0:03:34.560 see the implementation of the administration's tax reform of infrastructure plans, 0:03:34.600 --> 0:03:38.400 so that we're we're probably stuck in barely a two 0:03:38.840 --> 0:03:42.240 real GDP growth rate for the US as far as 0:03:42.320 --> 0:03:44.520 the eyes can see. How do you respond to the 0:03:44.560 --> 0:03:48.040 bulls that say we need a recession to really slip 0:03:48.040 --> 0:03:51.800 into a duncass kind of market. I don't think that's 0:03:51.840 --> 0:03:57.000 true empirically, um, you know, I think that the market 0:03:57.120 --> 0:04:00.720 is more governed by uncertainty. And I'll say what I 0:04:00.760 --> 0:04:05.400 said before on Bloombrook surveillance, I'll say it again. Donald 0:04:05.440 --> 0:04:09.839 Trump is going to make market volatility and economic uncertainty 0:04:09.840 --> 0:04:12.960 of outcomes great again. So I think that the incremental 0:04:13.920 --> 0:04:18.119 eight or ten dollars of SNP earnings from the administration's 0:04:18.160 --> 0:04:22.559 initiatives UM is likely in in let's say an SMP 0:04:23.160 --> 0:04:25.760 earnings terms for next year, is likely a pype train. 0:04:26.640 --> 0:04:29.040 I mean within this Doug is the idea of being 0:04:29.120 --> 0:04:34.320 completely short, being not hedged, but saying you can have 0:04:34.360 --> 0:04:37.200 some enthusiasm. No, I'll get to Twitter in our next section. 0:04:37.720 --> 0:04:40.680 But is there any part of a broader, large camp 0:04:40.800 --> 0:04:44.680 market where you can hide or is it so grim 0:04:44.720 --> 0:04:48.320 that you can't own utilities? You can't on this well, I, 0:04:48.440 --> 0:04:51.720 as I said, I do a bottom up kind of analysis, 0:04:51.800 --> 0:04:55.279 and I have actually a number of long positions, but 0:04:55.400 --> 0:04:58.520 on the net basis, I am that short. But these 0:04:58.640 --> 0:05:05.159 are specific ideas that meet my criteria for investment in 0:05:05.279 --> 0:05:08.200 very few stocks meet Mike's material investment. But there are 0:05:08.279 --> 0:05:14.479 some companies like Hartford Financial up in Connecticut, UM, Campbell, Soup, Twitter, 0:05:14.760 --> 0:05:18.279 et cetera. I'm even long a couple of retail stocks. 0:05:18.279 --> 0:05:21.040 Now what would they be? I mean, we we covered J. C. 0:05:21.200 --> 0:05:24.839 Penney on Friday. I meant to your listened to you 0:05:24.960 --> 0:05:27.640 listen to us? Of course I always do my We're 0:05:27.720 --> 0:05:31.960 colin up to fourteen listeners. That's just unbelten that's unreal. 0:05:34.200 --> 0:05:36.440 To the game. I can listen to the game list now, 0:05:36.520 --> 0:05:38.200 we'll do that in the next section. You want to 0:05:38.200 --> 0:05:41.080 come back, I'm gonna beat you to death. But you know, Doug, 0:05:41.120 --> 0:05:43.960 I I look at Amazon as a short. I mean, 0:05:44.040 --> 0:05:47.000 how do you short Jeff Bezos? That's like mom, Dad, 0:05:47.040 --> 0:05:50.599 apple Pie and the rest of it. I'm short Amazon 0:05:50.800 --> 0:05:54.040 Bass And this is clearly a contrarian view, which is 0:05:54.080 --> 0:05:57.479 typical of many of my popular shorts like Starbucks and Disney, 0:05:57.839 --> 0:06:00.760 and in this case, Amazon and I'm short of come 0:06:00.839 --> 0:06:06.200 based principally on the existential threat that antitrust issues and 0:06:06.320 --> 0:06:10.240 political viewpoints and initiatives may hold over the company. The 0:06:10.320 --> 0:06:14.520 company is finally attracting some media and political tension for 0:06:14.560 --> 0:06:19.360 its business practice. It's disrupting order parts, appliances, and its 0:06:19.360 --> 0:06:24.640 plans for food retailing through Whole Foods acquisition. It may 0:06:24.839 --> 0:06:28.159 very well have too many opportunities. Perhaps it's creating a 0:06:28.200 --> 0:06:33.120 massive smoke screen to mask business problems with profit generation, 0:06:33.680 --> 0:06:36.160 but that the core of my concern is whether Amazon 0:06:36.279 --> 0:06:39.800 is growing too big and that the disruptive impact of 0:06:39.839 --> 0:06:45.080 Amazon's growth and plans could lead to government restrictions that growth. 0:06:45.360 --> 0:06:47.120 Let's do Twitter right here. We've had a couple of 0:06:47.160 --> 0:06:50.360 minutes left here, and am I right in that You're 0:06:50.400 --> 0:06:52.080 a long, long, long and Twitter? Is that just a 0:06:52.120 --> 0:06:55.680 takeout idea on really long Twitter? I think that the 0:06:55.720 --> 0:07:00.400 market is paying nothing for um takeover option ality, a 0:07:00.480 --> 0:07:05.120 merger optionality. I think Twitter by this time next year 0:07:05.160 --> 0:07:08.440 will be part of a much larger company and its 0:07:08.480 --> 0:07:11.960 basic core businesses is fine despite you know the recent 0:07:12.200 --> 0:07:14.400 drop in the stock crisis. Well, but you need a 0:07:14.400 --> 0:07:19.400 lower stock trice stock price to affect a transaction. I 0:07:19.440 --> 0:07:22.280 think that the stock will probably be taken out in 0:07:22.280 --> 0:07:27.920 the neighbor, let's come back with Doug casts. We've got 0:07:28.000 --> 0:07:31.360 lots to talk about, including a picture and his family 0:07:31.440 --> 0:07:34.240 from the Los Angeles Dodgers of a few years ago. 0:07:34.360 --> 0:07:37.400 Mr cass is with Sea Breeze Partners. Doug Cass of 0:07:37.440 --> 0:07:40.840 Sea Breeze Partners will weigh in on the Fed. Now 0:07:40.840 --> 0:07:43.720 he's going to weigh in on the Browns, the Liechtenstein's, 0:07:43.960 --> 0:07:47.360 and the co Faxes. Sanford Brown, who is eighty one 0:07:47.440 --> 0:07:53.000 years old, Doug, I refuse to believe that Sandy Kofax 0:07:53.360 --> 0:07:58.040 is eighty one years old. We have had a lacious weekend, 0:07:58.800 --> 0:08:03.600 including images from Charlottesville that we're just extraordinary about Jews 0:08:03.680 --> 0:08:06.840 and about a lot of other elements of hatred in 0:08:06.920 --> 0:08:12.840 this country. Take us back to nineteen sixty five. I 0:08:12.960 --> 0:08:18.360 remember the firestorm of debate when Mr Colfax said, no, 0:08:18.760 --> 0:08:28.520 I will not pitch Um. It was actually excuse me, well, Sandy, Um, 0:08:28.560 --> 0:08:31.720 you know it's I would say that Tom baseball is 0:08:31.760 --> 0:08:35.240 a lot like investing, you know, as the dude said 0:08:35.280 --> 0:08:38.920 in The Big Lebowski, strikes and gutters, ups and downs. 0:08:39.559 --> 0:08:43.640 And Sandy in the mid sixties developed that authortic shoulder. 0:08:45.080 --> 0:08:51.040 And I remember sitting with him and my grandmother, Jean Kofax, 0:08:51.880 --> 0:08:56.160 in which he said to my grandfather, Harry Kofax, if 0:08:56.200 --> 0:08:59.280 he continued, and this is actually in late sixty five, 0:08:59.320 --> 0:09:05.439 if he continue baseball, he might lose his army. Um, 0:09:05.520 --> 0:09:07.360 you know. And I don't know if it was a 0:09:07.400 --> 0:09:11.360 function of medicine, the absence of medical advances at that time. 0:09:11.400 --> 0:09:16.000 I suspect he would have had surgery, yeah, Tommy seventeen. 0:09:17.000 --> 0:09:20.800 But um, it was. It was kind of catastrophic as 0:09:20.840 --> 0:09:24.280 a Dodger fan and as his cousin. I mean, within 0:09:24.360 --> 0:09:27.280 it is growing up in benson Hurst and you know, 0:09:27.440 --> 0:09:31.280 on Long Island in that time. It's realm. We moved 0:09:31.320 --> 0:09:34.880 to my hometown, Rockville Center, Long Island on the South Show. Briefly. Yeah, 0:09:34.920 --> 0:09:38.120 they were, you know, in Rockville Center, and uh, he 0:09:38.200 --> 0:09:41.640 was essentially folks a walk on at Cincinnati and basketball, 0:09:41.760 --> 0:09:44.920 and uh, I guess he was a walk on. He 0:09:44.920 --> 0:09:47.880 had like three tryouts in the majors before branch Rickey 0:09:47.880 --> 0:09:50.880 decided he could bring the He was a basketball player 0:09:50.880 --> 0:09:53.920 at Lafayette High School and his best friend was Wilpon, 0:09:54.000 --> 0:09:57.440 who owned New York Mets, and Wilpon was a picture 0:09:58.040 --> 0:10:00.560 and he wanted to hang out with Fred Wilpon, So 0:10:00.640 --> 0:10:03.079 he decided to try out for the baseball team and 0:10:03.120 --> 0:10:06.319 place bas at Lafayette High School. Doug, Within, you you're 0:10:06.360 --> 0:10:09.679 being part of this family, the greater Cofax family. Do 0:10:09.720 --> 0:10:15.199 you tec detect the difference in Charlottesville? This weekend versus 0:10:15.480 --> 0:10:21.280 the debates of N sixty six over religion and the 0:10:21.320 --> 0:10:24.400 importance of yan Kapoor is it? Is it a different 0:10:24.440 --> 0:10:27.800 discussion now than it was back then. I think that 0:10:27.840 --> 0:10:33.840 the same prejudice is unfortunately existed then um as they 0:10:33.880 --> 0:10:38.040 do now. And I hate to say that um as 0:10:38.320 --> 0:10:40.800 Mayor Bloomberg once said, I'm a New Yorker and I 0:10:40.880 --> 0:10:43.880 know a con when I see it. And unfortunately the 0:10:43.920 --> 0:10:49.280 President disavowed the action on Friday, but didn't disavow the actors. 0:10:49.320 --> 0:10:52.160 And I think that's extremely disappointing, and that was expressed 0:10:52.160 --> 0:10:55.120 by many of his Republican beyers. We should mention that 0:10:55.559 --> 0:10:58.360 Mr Bloomberg, the former mayor, is a principal owner of 0:10:58.640 --> 0:11:01.560 Bloomberg LP. And this ation, Doug, we've just got a 0:11:01.640 --> 0:11:05.080 minute left, which is all you need to describe. Uh, 0:11:05.240 --> 0:11:09.120 not the collapse, but the desire I think of everyone 0:11:09.240 --> 0:11:12.120 for the Yankees to make a go of it, um 0:11:12.280 --> 0:11:16.000 for our global audience. Their relief pitching failed in two 0:11:16.000 --> 0:11:19.439 of three games. What's to do? Mr Cass, Mr Cofax 0:11:19.480 --> 0:11:22.400 can't do it? Right now? I'll tell you who are 0:11:22.440 --> 0:11:24.800 doing it? To Los Angeles Dodgers. They haven't lost the 0:11:24.840 --> 0:11:28.319 series since early June. The winning percentage I think is 0:11:28.360 --> 0:11:31.760 that we're seve. Is it just about money? I mean, 0:11:31.800 --> 0:11:33.800 come on, they bought the team. It's more money. It's 0:11:33.840 --> 0:11:39.120 more money than thank you. They need you know what 0:11:39.160 --> 0:11:42.559 they need. They need sandy on the mound and they 0:11:42.559 --> 0:11:45.840 need this thirteen year old Little League World Series kid 0:11:46.160 --> 0:11:49.959 um Jace Blaylock plays for Georgia, who hit a three 0:11:50.440 --> 0:11:56.760 seventy five years old in the trees left. I would 0:11:56.800 --> 0:11:59.880 suggest I would suggest suggestion Doug. I was just in 0:12:00.240 --> 0:12:03.720 Mr Drysdale to put it under somebody's chin. Doug cast 0:12:03.880 --> 0:12:06.960 thank you so much, UH this morning on the equity markets. 0:12:07.080 --> 0:12:10.120 Mr Cass's caution on the markets, and also of course 0:12:10.200 --> 0:12:14.560 a snapshot there of Benson Nurst and Rockville Center from 0:12:14.600 --> 0:12:30.719 another time. UH and plays what they did in Washington 0:12:30.960 --> 0:12:35.680 a number of years ago. A great UH financial supporter 0:12:35.800 --> 0:12:40.839 and fundraiser for President Obama was UH Fred hackber And 0:12:40.840 --> 0:12:43.200 and he got his job because he gets up early 0:12:43.240 --> 0:12:44.839 in the morning, which is what you do with the 0:12:44.880 --> 0:12:49.080 Small Business Administration and the Export Import Bank as well, 0:12:49.120 --> 0:12:52.000 and joining Center studios and well timed. I mean, we 0:12:52.040 --> 0:12:55.400 could talk I think for at least two hours here 0:12:55.760 --> 0:12:58.880 about your family's heritage, and and you know one of 0:12:58.920 --> 0:13:01.559 your uncles I believe was killed at Normandy, and you 0:13:01.600 --> 0:13:04.240 know all the emotion of the weekend that we saw. 0:13:04.360 --> 0:13:06.559 But let me start with business. Is it? Is it? 0:13:06.960 --> 0:13:09.600 You're retired as the head of the Export Import Bank? 0:13:11.920 --> 0:13:14.520 Wrapped up my time? There? I don't consider you're wrapped 0:13:14.600 --> 0:13:18.000 up your time. Here's the door. What's your hurry? What's 0:13:18.040 --> 0:13:21.600 the state of the Export Import Bank under President Trump? Well, 0:13:22.080 --> 0:13:24.280 it's a little vague, to be honest with you. He 0:13:24.360 --> 0:13:28.440 has indicated more of late that he's supportive. Uh. He 0:13:28.520 --> 0:13:32.280 has indicated his nominee for the chairman is someone who's 0:13:32.280 --> 0:13:35.560 been and ultimately opposed to the bank, part of the 0:13:35.640 --> 0:13:39.080 leadership against the bank. So it's hard to read those 0:13:39.120 --> 0:13:42.760 tea leaves. But he still has an empty board. They're 0:13:42.760 --> 0:13:45.400 just two acting members. You need three for a quorum, 0:13:45.440 --> 0:13:48.440 but there's no quorum. Bank has been essentially lapsed for 0:13:48.480 --> 0:13:52.000 two over two years for any major transactions, and it's 0:13:52.040 --> 0:13:55.760 hurts our competitiveness and hurts job creation. You have been 0:13:55.800 --> 0:13:59.120 more than visible in some of the themes that seemed 0:13:59.160 --> 0:14:02.560 to anger the people that were so angry in Charlottesville. 0:14:03.440 --> 0:14:05.559 This weekend. There's any number of ways to take this, 0:14:05.679 --> 0:14:09.960 beginning with your support for President Obama, your support for 0:14:11.240 --> 0:14:15.280 LGBT rights, and and critically your support of your family, 0:14:15.360 --> 0:14:20.160 the Lillian Vernon people, and and uh the the heritage 0:14:20.680 --> 0:14:24.200 of your family. What was it like for Fred Hackburg 0:14:24.320 --> 0:14:28.080 to see the signs I put out on Twitter direct 0:14:28.520 --> 0:14:32.280 hatred for Jews? How did you process that and did 0:14:32.320 --> 0:14:35.440 you bring it back to the president. Well, what is 0:14:35.480 --> 0:14:38.960 so shocking? And when you think about terrorism, and many 0:14:39.000 --> 0:14:42.640 have called this domestic terrorism, terrorism is about fear. It's 0:14:42.680 --> 0:14:46.040 about creating a sense of anxiety and people, not just 0:14:46.120 --> 0:14:48.440 for the people in Charlottesville, but for people throughout the 0:14:48.520 --> 0:14:52.640 United States. It says, be careful, be watchful. You're not safe, 0:14:53.000 --> 0:14:56.240 You're not in a secure place. And so what's frightening 0:14:56.280 --> 0:14:59.520 I think about the weekend is this is about striking 0:14:59.640 --> 0:15:03.800 fear and and putting a damper on people's sense of 0:15:04.040 --> 0:15:06.880 being an American, being grateful to be here and ask 0:15:07.000 --> 0:15:08.960 in saying you should really be very careful and not 0:15:09.000 --> 0:15:12.200 sure of yourself. And so that was what so was 0:15:12.280 --> 0:15:15.840 frightening I thought about this weekend. Hi, I just want 0:15:15.840 --> 0:15:17.840 to jump in here and ask a question sort of 0:15:17.960 --> 0:15:21.880 back to you know, Charlottesville and the issue of, um, 0:15:21.960 --> 0:15:24.760 the Export empower Bank. But can you make the best 0:15:24.880 --> 0:15:30.680 argument to let's call them the global skeptics that um, 0:15:30.720 --> 0:15:32.920 I think you know, we're behind the Trump movement for 0:15:33.000 --> 0:15:35.640 why we need the Export Import Bank. Now, I mean 0:15:35.640 --> 0:15:38.640 the argument is that it's kind of a chrony capitalism, 0:15:38.720 --> 0:15:41.760 and uh, it doesn't really benefit most Americans and so forth. 0:15:41.840 --> 0:15:44.000 What is the counterpoint to that when you're trying to 0:15:44.040 --> 0:15:46.960 sort of address those concerns. Well, first of all, if 0:15:46.960 --> 0:15:49.320 you're a global skeptic and you believe in sort of 0:15:49.640 --> 0:15:54.520 America first, American manufacturing in America economic prowess, then you 0:15:54.560 --> 0:15:56.280 need to believe in the x in bank. We're not 0:15:56.320 --> 0:15:58.480 gonna be able to sell overseas and I'm not gonna 0:15:58.480 --> 0:16:00.640 be able to compete and go hoe to toe with 0:16:00.760 --> 0:16:03.760 the Chinese, the Koreans, the Germans, if we don't have 0:16:03.800 --> 0:16:07.240 a financial institution just like they do. There are nineties 0:16:07.560 --> 0:16:10.800 export credit agencies around the world, each one slugging it 0:16:10.840 --> 0:16:13.680 out to create jobs in their country. So for us 0:16:13.720 --> 0:16:15.960 to try and go into go to that fight with 0:16:16.040 --> 0:16:21.880 one hand tied behind our back is simply crazy. I look, 0:16:22.000 --> 0:16:23.720 I look at this friend and just in the brief 0:16:23.720 --> 0:16:27.040 time that we we have for you. And as Eli 0:16:27.120 --> 0:16:31.440 mentions globalists, how did we become a nation of globalists? 0:16:31.480 --> 0:16:34.920 What does what does globalists mean? That's a great question. 0:16:34.920 --> 0:16:36.720 First of all, I think we became a nation because 0:16:36.720 --> 0:16:39.640 we're a nation of immigrants. As you mentioned, my family 0:16:39.680 --> 0:16:42.840 came here uh in the lead up to World War two, 0:16:43.720 --> 0:16:47.200 where a nation were the most diverse nation in the world. 0:16:47.400 --> 0:16:50.920 So people in our country have connections to every country 0:16:50.920 --> 0:16:53.600 around the world, not so if you're if you're German 0:16:53.720 --> 0:16:56.280 or French or British in the same way. So I 0:16:56.320 --> 0:16:59.280 think there's a realization that we are five percent of 0:16:59.280 --> 0:17:03.640 the world's cup population is out there. So we want 0:17:03.680 --> 0:17:07.040 to have a strong economy, creating a lot of jobs, 0:17:07.680 --> 0:17:10.160 having a great simularity. We need to sell to them. Okay, 0:17:10.200 --> 0:17:13.000 you raise money, you raise big money for the president. 0:17:13.480 --> 0:17:17.000 Greg Vllier mentioned this morning, note the disarray of the 0:17:17.040 --> 0:17:22.480 Democratic Party. Do the Democrats have to migrate away from 0:17:22.600 --> 0:17:29.600 a coastal progressive tone and refine scoop and refined scoop 0:17:29.680 --> 0:17:32.359 Jackson's Democrats? Are they out there? Or is that a 0:17:32.400 --> 0:17:35.560 wasted task? I think the future of the Democratic party 0:17:35.600 --> 0:17:38.439 is going to be with young people, with millennials, with 0:17:38.760 --> 0:17:42.600 urban people. Um, we don't want to write anybody off, 0:17:43.040 --> 0:17:45.760 but clearly we have to understand who our appeal is. 0:17:45.800 --> 0:17:47.240 And I think one of the appeals we have to 0:17:47.280 --> 0:17:49.320 do is for people who don't get a fair shake 0:17:49.359 --> 0:17:55.520 in this society. And that has to do with workers, minorities, women, uh, immigrants, 0:17:55.560 --> 0:17:57.199 and so we can't forget that and that has to 0:17:57.200 --> 0:18:00.600 be front and center as we pursue a policy. Washington, 0:18:02.000 --> 0:18:04.160 first time I've ever asked this question out here. I'm gonna, 0:18:04.200 --> 0:18:06.439 I'm honored to ask it with you. When does President 0:18:06.440 --> 0:18:11.400 Obama decided to run again? Well, the the constitution will 0:18:11.400 --> 0:18:13.520 prohibit that, so he can't do they can't do that again. 0:18:13.640 --> 0:18:18.440 To that, Fred Hawkford, thank you so much, greatly appreciated, 0:18:18.480 --> 0:18:21.119 former head of the Export Import Bankers. Well, Eli, you 0:18:21.160 --> 0:18:23.760 gotta write a column on that. President Obama, even if 0:18:23.760 --> 0:18:26.719 he waits out at Grover Cleveland term can't run again. 0:18:27.160 --> 0:18:30.000 I mean that's the law, right right. Yeah, Well, I 0:18:30.000 --> 0:18:31.160 mean I know that there are a lot of people. 0:18:31.200 --> 0:18:32.520 I mean I think I feel like he's one of 0:18:32.560 --> 0:18:35.239 those figures right now who's left that can unify us 0:18:35.280 --> 0:18:37.680 and it would be nice of the President Trump would 0:18:37.720 --> 0:18:40.040 sort of recognize that this is one of those moments 0:18:40.080 --> 0:18:43.280 of crisis where he needs to sort of be bigger 0:18:43.320 --> 0:18:47.399 than his base, even though I I maintain that this 0:18:47.480 --> 0:18:49.600 is not these these these clansmen are not his base. 0:18:49.640 --> 0:19:03.480 I mean, these are fringe haters. He is the go 0:19:03.680 --> 0:19:07.760 to guy for so many about perspective of our navy 0:19:08.200 --> 0:19:11.119 and where it fits in. He grew up a most 0:19:11.200 --> 0:19:16.920 interesting life in UH Los Angeles, UH, to say the least, 0:19:16.960 --> 0:19:20.679 and then on to a service for the nation in 0:19:20.680 --> 0:19:25.600 the United States. UH Navy Admiral Moan UH this morning, Admiral, 0:19:25.800 --> 0:19:28.800 what is your update on the state of our navy 0:19:29.000 --> 0:19:32.360 off the shores of Korea? Well, and I know it's 0:19:32.359 --> 0:19:36.680 gonna be one of high level of readiness. UM. We 0:19:36.720 --> 0:19:45.080 have for years put our most technically advanced ships UH 0:19:45.119 --> 0:19:48.920 and UH air wing. If you we have an air 0:19:48.960 --> 0:19:52.800 wing of plus about seventy five airplanes there plus a 0:19:53.200 --> 0:19:57.280 nuclear aircraft carrier which is homeported in Japan. So they'll 0:19:57.320 --> 0:20:03.160 be not just technically advanced, but UH, they're readiness level. 0:20:03.560 --> 0:20:06.800 It will be exceptionally high. I mean it is normally 0:20:07.320 --> 0:20:10.239 and then it will be that much more so. Just 0:20:10.320 --> 0:20:13.359 because of the recent attentions, I know ELI has got 0:20:13.400 --> 0:20:15.480 a lot of questions. Let me ask one question. This 0:20:15.520 --> 0:20:18.040 is a question I got at least three times this weekend, 0:20:18.440 --> 0:20:22.960 including from one child as well. Can we shoot Korean 0:20:23.040 --> 0:20:26.280 missiles out of the air? How do we do that? 0:20:26.440 --> 0:20:29.920 Is that a secret? Or do people actually know how 0:20:30.000 --> 0:20:33.359 we do that if they were ever to fire a 0:20:33.440 --> 0:20:37.119 missile with a dangerous vector. Well, you've seen actually in 0:20:37.640 --> 0:20:41.879 recent weeks these missile tests which have gotten uh a 0:20:41.920 --> 0:20:47.119 lot of publicity. And so the short answer to question is, 0:20:47.240 --> 0:20:51.399 yes we can. It is the way I've described it 0:20:51.440 --> 0:20:54.000 and others as well. It's hitting a bullet with a bullet. 0:20:54.200 --> 0:20:57.840 The speeds are several mock if you will, coming at 0:20:57.880 --> 0:21:02.880 each other. Um. But we've developed that technology over many, 0:21:02.920 --> 0:21:08.000 many years, actually decades, so that we have that capability 0:21:08.280 --> 0:21:12.080 as we speak, Admiral Millen thinks so much for for 0:21:12.119 --> 0:21:15.240 doing this. Let me ask you this, Um. We we 0:21:15.359 --> 0:21:18.760 learned last week, UM that there is a Defense Intelligence 0:21:18.760 --> 0:21:22.560 Agency estimate that North Korea has the technology or capability 0:21:22.560 --> 0:21:26.320 to miniaturize a nuclear device for a warhead. But um, 0:21:26.359 --> 0:21:29.120 you know, as I reported in and others have reported, 0:21:29.440 --> 0:21:31.840 this has been kind of floating around, you know, in 0:21:31.840 --> 0:21:34.439 in the intelligence community for a while. How much of 0:21:34.440 --> 0:21:37.919 a shock is that really to the US, uh, you 0:21:37.960 --> 0:21:40.679 know military at this point? Um, And when do you 0:21:40.720 --> 0:21:42.720 think we really learned that? Is that recent or is 0:21:42.760 --> 0:21:44.720 that is or have we known it for a while? 0:21:45.119 --> 0:21:48.639 I think I think the shock the shock is not 0:21:48.960 --> 0:21:53.679 that uh he's either developed or he's very close. I 0:21:53.720 --> 0:21:57.440 think the shock is that he's done it as quickly 0:21:57.600 --> 0:22:00.000 as he can. While we've talked about it for years. 0:22:00.440 --> 0:22:04.240 There's one thing, at least to me very clear, uh 0:22:04.680 --> 0:22:08.119 watching Kim Jong un, is he is on a very 0:22:08.320 --> 0:22:14.320 rapid pace to develop this system, the missiles, the nuclear technology, 0:22:14.400 --> 0:22:17.720 and to make them and have that capability, much more 0:22:17.840 --> 0:22:22.680 so than his father was in many ways. The number 0:22:22.720 --> 0:22:26.480 of tests that he has conducted. UM. And this, to me, 0:22:26.880 --> 0:22:30.439 this is his number one goal. Uh, And he is 0:22:30.680 --> 0:22:35.280 he is significantly outpacing anything that's happened there in the past. 0:22:35.320 --> 0:22:37.600 So I think if there is a shock, is that 0:22:37.600 --> 0:22:40.639 that he's there. If he is so quickly, let me 0:22:40.760 --> 0:22:42.840 let me follow up with something and that you know, 0:22:42.880 --> 0:22:45.280 for those of us who've watched the North Korea crisis 0:22:45.920 --> 0:22:48.520 unfold over the years, one thing that we've noticed that 0:22:48.520 --> 0:22:51.040 the North Koreans really do not negotiate in good faith. 0:22:51.320 --> 0:22:53.000 I think the best example of that is during the 0:22:53.040 --> 0:22:57.479 George W. Bush administration, when we began administration negotiations by 0:22:57.520 --> 0:23:00.360 lifting sanctions and taking them off the state sponsor list. 0:23:00.800 --> 0:23:03.480 You know, they were secretly working with the Syrians to 0:23:03.560 --> 0:23:06.359 develop a nuclear site UM, sending their technicians and so 0:23:06.440 --> 0:23:10.160 forth over there. What is the formula and the argument 0:23:10.240 --> 0:23:13.720 for how we could negotiate them down, uh in terms 0:23:13.720 --> 0:23:16.119 of the nuclear program this time when it hasn't worked 0:23:16.119 --> 0:23:18.440 for nearly twenty five years. Well, I think, and I 0:23:18.520 --> 0:23:21.120 think you make a good point, Eli, and I think 0:23:21.119 --> 0:23:25.520 the likelihood should we get into direct negotiations with the 0:23:25.560 --> 0:23:31.040 North that the behavior in that regard would change is 0:23:31.600 --> 0:23:35.199 pretty small, So we would we should expect more of 0:23:35.240 --> 0:23:38.679 the same. That said, what what hasn't happened in the past, 0:23:38.720 --> 0:23:42.119 and what I believe is the only path now is 0:23:42.200 --> 0:23:46.560 through Beijing. We've always said that Beijing has always been 0:23:47.119 --> 0:23:51.400 very reluctant to take the lead UM, and yet I 0:23:51.440 --> 0:23:55.159 just don't see a peaceful resolution of this crisis without 0:23:55.240 --> 0:23:59.119 Beijing really stepping up. And that doesn't mean alone, because 0:23:59.160 --> 0:24:03.480 we should We should support them. We should do everything 0:24:03.520 --> 0:24:07.960 we can to allay China's concerns about what would happen 0:24:08.119 --> 0:24:12.080 with the United States being very active there, to include 0:24:12.359 --> 0:24:16.960 the instability in the North UH, the the the worry 0:24:17.040 --> 0:24:20.280 that there would be a regime change UH and that 0:24:20.320 --> 0:24:25.200 we'd have unification UH, the financial impact of that to 0:24:25.840 --> 0:24:29.200 certainly the region and China. So I think we can 0:24:29.240 --> 0:24:34.400 go a long way to allaying and guaranteeing China that 0:24:34.480 --> 0:24:38.199 their interests are best served by doing this as well, 0:24:38.560 --> 0:24:42.560 without undermining other things that they worry about, including us 0:24:42.640 --> 0:24:45.439 back up at the Yalu. So that's the path I 0:24:45.480 --> 0:24:48.040 think that has to that has to be taken now 0:24:48.040 --> 0:24:50.159 in light of that, and I think most people, I 0:24:50.240 --> 0:24:52.280 mean agree with you. I think that's a strong argument. 0:24:52.760 --> 0:24:54.919 I mean, is there an is there a case to 0:24:54.960 --> 0:24:59.560 be made that Trump's UH kind of somewhat reckless rhetoric 0:25:00.160 --> 0:25:03.360 UH in the last week on North Korea could potentially 0:25:03.680 --> 0:25:06.840 change the calculation for China to make them realize that 0:25:06.920 --> 0:25:08.880