WEBVTT - Amazon-Whole Foods Deal Could Be Tech or Grocery, Profusek Says 0:00:00.240 --> 0:00:04.040 Runt You by Bank of America Mary Lynch with virtual reality, 0:00:04.320 --> 0:00:09.719 virtually everything will change. Discover opportunities in a transforming world 0:00:10.160 --> 0:00:14.440 VI of a mL dot Com, slash VR, Mary Lynch, 0:00:14.520 --> 0:00:28.120 Pierced Fenner and Smith Incorporated. Ye. Welcome to the Bloomberg 0:00:28.160 --> 0:00:32.360 Surveillance Podcast. I'm Tom Keene with David Gura. Daily we 0:00:32.440 --> 0:00:36.080 bring you insight from the best of economics, finance, investment, 0:00:36.120 --> 0:00:42.200 and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:42.280 --> 0:00:50.080 Bloomberg dot Com, and of course on the Bloomberg Will 0:00:50.120 --> 0:00:51.720 be Control. As I said, head a public policy at 0:00:51.960 --> 0:00:55.639 CLOM that joins me now at last week, Infrastructure Week, 0:00:55.680 --> 0:00:58.520 this week Workforce Development Week at the White House, they're 0:00:58.520 --> 0:01:02.440 eager to shift focus onto these economic initiatives. Is that working? 0:01:02.520 --> 0:01:04.440 Is that making any kind of a difference with them 0:01:04.440 --> 0:01:07.760 getting uh their agenda back front and center. Yeah, I mean, 0:01:08.000 --> 0:01:11.200 you know, it's um, there's certainly not for lack of trying. Um. 0:01:11.319 --> 0:01:13.080 You know, I think there is a lot of focus 0:01:13.080 --> 0:01:16.520 and fanfare around Infrastructure Week, for example last week and 0:01:16.560 --> 0:01:20.679 then this week with the Apprenticeship Executive Order. But I think, 0:01:20.720 --> 0:01:23.760 you know the reality is that this administration is being 0:01:23.800 --> 0:01:27.839 plagued by the Russia, Um, the Russia investigation, and even 0:01:27.880 --> 0:01:30.760 if there's nothing that is conclusive that comes out of 0:01:30.800 --> 0:01:34.120 that and the President and his administration and campaign are 0:01:34.160 --> 0:01:37.440 completely exonerated, you know it just it is yet another 0:01:37.600 --> 0:01:41.560 headwind um to getting done a very difficult and ambitious 0:01:41.600 --> 0:01:45.399 policy agenda under the best of circumstances. Honestly, so, Um, 0:01:45.400 --> 0:01:47.480 you know, they're the Congress, as you said, there's making 0:01:47.560 --> 0:01:51.920 some progress on healthcare, but certainly I think at this point, um, 0:01:52.200 --> 0:01:54.040 right after the election, they would have assumed that they 0:01:54.080 --> 0:01:56.440 would have been much farther. Has something changed about the 0:01:56.520 --> 0:02:00.000 level of engagement the administration has with business with executives 0:02:00.080 --> 0:02:02.040 in light of perhaps the president's trip to the Middle 0:02:02.040 --> 0:02:06.280 East in Europe were designed to withdraw from the Paris Agreement. 0:02:06.600 --> 0:02:09.320 I remember early on in the administration's tenure it seemed 0:02:09.400 --> 0:02:13.720 like big executives were coming through Washington very regularly. And 0:02:13.840 --> 0:02:16.720 again with these two weeks that we've had theme weeks 0:02:16.720 --> 0:02:18.520 focused on the economy, it doesn't seem like it had 0:02:18.560 --> 0:02:20.400 the star power, for lack of a better term, that 0:02:20.639 --> 0:02:22.240 the past weeks it had. Yeah, And I think that's 0:02:22.280 --> 0:02:24.280 I think that's exactly right. And I think there's UM, 0:02:24.600 --> 0:02:27.320 there's this business counsel that the President has put together, 0:02:27.440 --> 0:02:31.840 and you're to his credit, he started his administration really 0:02:31.880 --> 0:02:35.639 soliciting a lot of feedback from many different stakeholders, including 0:02:35.639 --> 0:02:38.960 folks in corporate America. I mean, it does seem like 0:02:39.200 --> 0:02:43.520 that solicitation has slowed down. And you're right. I mean, 0:02:43.520 --> 0:02:45.639 I think that there are some companies and you've already 0:02:45.639 --> 0:02:48.240 seen some folks even on Twitter and other forms of 0:02:48.280 --> 0:02:51.000 social media, sort of come out against the president UM 0:02:51.040 --> 0:02:54.680 around you know, around the Paris UH Treaty and other 0:02:54.919 --> 0:02:58.480 other more controversial items. So yes, and I think that's 0:02:58.560 --> 0:03:01.760 it's sort of anecdotal. You have seen a slowing down 0:03:01.800 --> 0:03:04.600 of engagement from from corporate America. With that said, I 0:03:04.600 --> 0:03:07.799 think folks are still hopeful that we will see some 0:03:07.919 --> 0:03:11.400 progress under regulation, that we will see some form of 0:03:11.840 --> 0:03:16.200 fiscal stimulus, tax reform, infrastructure. Though as you know, we 0:03:16.240 --> 0:03:20.160 both know, you know, every day is important and UM 0:03:20.440 --> 0:03:24.960 and the legislative calendar is incredibly tight and not in 0:03:25.000 --> 0:03:27.600 the favor of getting these ambitious things done. It strikes 0:03:27.600 --> 0:03:29.880 me you mentioned regulation. When you look at all this 0:03:29.960 --> 0:03:32.400 administration is trying to do, it is on regulation that 0:03:32.400 --> 0:03:35.040 we've gotten the most clarity. Of course, we have the 0:03:35.280 --> 0:03:37.960 House voting on this Financial Choice Act a few days ago, 0:03:38.400 --> 0:03:41.240 passing the House apparently dead on arrival in the Senate. 0:03:41.520 --> 0:03:43.960 But we did get this hundred fifty page document from 0:03:43.960 --> 0:03:47.840 the Treasury Department on regulation with instruction to regulatory agencies 0:03:47.880 --> 0:03:51.160 to reevaluate rules that are in place. Now, when you 0:03:51.200 --> 0:03:54.360 compare that, say to the principles for tax reform, there 0:03:54.440 --> 0:03:57.000 is more detail. Uh, and it seems likely that might 0:03:57.080 --> 0:03:59.320 lead to some change. Yeah, for sure. And um, you 0:03:59.320 --> 0:04:02.120 know we've we've been actually evaluating in our Investment committee 0:04:02.120 --> 0:04:05.280 in other places in PIMCO. You know that report in detail, 0:04:05.400 --> 0:04:08.600 and it was smart because that report, the bulk of 0:04:08.640 --> 0:04:13.200 the recommendations are things that the administration can do without Congress. Um, 0:04:13.240 --> 0:04:16.080 can do through the regulatory channels. But in a big 0:04:16.120 --> 0:04:19.520 butt here. Um. Anyone is familiar with Washington, especially on 0:04:19.520 --> 0:04:22.760 the regulatory side, these things take a long time. They 0:04:22.800 --> 0:04:26.640 have to go through the Administrative Procedures Act Notice for 0:04:26.720 --> 0:04:29.600 public comment. Uh. You know, it's just a long way 0:04:29.640 --> 0:04:32.080 of saying it will take time. So will we see 0:04:32.080 --> 0:04:35.200 some regulatory softening. We are expecting that you will, but 0:04:35.320 --> 0:04:37.760 probably not until the later part of twenty eighteen or 0:04:37.760 --> 0:04:40.680 twenty nineteen. How do you assess the level of engagement 0:04:40.960 --> 0:04:44.200 the White House has with Republicans and Democrats on on 0:04:44.320 --> 0:04:46.960 Capitol Hill right now somewhere invited to the White House 0:04:47.000 --> 0:04:48.919 earlier this week, it seems like the President's making an 0:04:48.960 --> 0:04:51.719 attempt to have overtures to members of Congress to to 0:04:51.800 --> 0:04:53.880 keep them involved in all this. How much do they 0:04:53.880 --> 0:04:56.119 want the White House involved when it comes to tax reform, 0:04:56.200 --> 0:04:58.840 when it comes to healthcare reform? Do they want it 0:04:58.880 --> 0:05:01.599 to be a in glove relationship that they want to 0:05:01.600 --> 0:05:03.600 work closely with the White House? Yeah, I mean, for 0:05:03.800 --> 0:05:08.239 I think they do. UM. But you know, at least 0:05:08.279 --> 0:05:10.400 at the sort of the beginning days of the administration, 0:05:10.440 --> 0:05:12.400 I think there was a lot of hope that, you know, 0:05:12.480 --> 0:05:15.800 unlike maybe the Obama administration, who did not necessarily have 0:05:15.920 --> 0:05:18.440 great relationships on the Hill on both sides of the aisle, 0:05:18.760 --> 0:05:21.560 that this would be sort of a new paradigm um 0:05:21.600 --> 0:05:23.400 again on both sides of the aisle, that this would 0:05:23.400 --> 0:05:27.760 maybe be there'll be some more bipartisanship, biparson comedy ushered 0:05:27.800 --> 0:05:30.560 in by the Trump administration. Unfortunately, we haven't seen that. 0:05:31.040 --> 0:05:32.960 Um and again this has to do with the approval 0:05:33.040 --> 0:05:36.080 rating among of Trump among Democrats, and it's around seven 0:05:36.120 --> 0:05:39.039 percent according to the last Gallop Pole. And as a result, 0:05:39.080 --> 0:05:41.640 there is no political adventive for Democrats to negotiate with 0:05:41.640 --> 0:05:45.200 the administration. Good morning, let be cantral with us. It's 0:05:45.240 --> 0:05:46.960 a really you know, it's sort of like David, It's 0:05:47.000 --> 0:05:50.000 a Friday where it's like briefing Friday. I feel like 0:05:50.040 --> 0:05:51.920 I need to read all weekends just to keep up 0:05:51.960 --> 0:05:54.799 with things. It's good to have Libby Cantra with Pimco 0:05:55.320 --> 0:05:57.440 with us. I I I look at Liberty and I 0:05:57.480 --> 0:05:59.160 have to go back to a guy I believe he 0:05:59.320 --> 0:06:01.440 dark in the door or at your shop a few 0:06:01.520 --> 0:06:03.880 years ago, a guy named el Arian. I think it 0:06:03.960 --> 0:06:08.280 took some courses at Cambridge a while back. Dr el 0:06:08.360 --> 0:06:13.640 Arian believes in the unknown unknowns. That's a really good 0:06:13.720 --> 0:06:20.200 concept for your Washington. What's your unknown unknown within all 0:06:20.200 --> 0:06:22.800 that we're being confronted with, right, I think there's the 0:06:22.880 --> 0:06:26.120 only certainty is uncertainty at this point. I mean there 0:06:26.360 --> 0:06:28.400 every day, as we were talking about before, I mean, 0:06:28.440 --> 0:06:32.320 the the news cycle is just um so replete with 0:06:32.839 --> 0:06:36.640 new developments that on their own would be major stories. Um, 0:06:36.680 --> 0:06:39.880 I think people are becoming a little bit desensitized. You know, 0:06:39.920 --> 0:06:42.720 I do think that the Russiest story. Again, we don't 0:06:42.720 --> 0:06:45.279 have a view on that and how that will turn out, 0:06:45.520 --> 0:06:48.800 but that will continue to play the president you mailed 0:06:48.960 --> 0:06:51.520 you mail. But the issue here is Robert Mueller is 0:06:51.560 --> 0:06:55.200 not going to be desensitized. That's the issue. All of 0:06:55.279 --> 0:06:57.760 us are. But David Garral helped me here. You're the 0:06:57.760 --> 0:07:01.159 Washington next as well. I can't believe Mr Mueller is 0:07:01.160 --> 0:07:04.200 going to be desensitized. No, in my sense of the 0:07:04.240 --> 0:07:06.960 investigation is it since very early stages, and so in 0:07:07.080 --> 0:07:09.440 terms of unknow unknowns, I think a huge X factor, 0:07:09.480 --> 0:07:11.240 Tom is just how long this is going to take. 0:07:11.280 --> 0:07:14.560 And so then we could go to the X files 0:07:15.400 --> 0:07:19.559 and if you see, you know, any leaks into your point, 0:07:19.600 --> 0:07:22.600 if this thing draw is sort of longer dated and 0:07:22.880 --> 0:07:26.400 is into I mean it is going to be. Um. 0:07:26.600 --> 0:07:30.160 It's so your question about engaging with the administration terms 0:07:30.160 --> 0:07:33.400 of members of Congress, it then becomes politically more difficult 0:07:33.440 --> 0:07:36.440 for Republicans to really um take up the mantle for 0:07:36.480 --> 0:07:40.240 the administration. And I think you're already seeing some distancing 0:07:40.480 --> 0:07:43.120 from Republican members but at this point they want to 0:07:43.120 --> 0:07:47.040 see things get done, and for for now, it does 0:07:47.120 --> 0:07:50.120 seem that aligning themselves with the administration still works to 0:07:50.160 --> 0:07:52.280 their advantage, although I don't know how long that will last. 0:07:52.320 --> 0:07:55.200 I mentioned this congressional baseball game glancingly at the top 0:07:55.240 --> 0:07:56.880 of the show, but a line stood out to me 0:07:56.920 --> 0:07:59.800 from some remarks the President made yesterday. He said, Steve Scalise, 0:07:59.880 --> 0:08:03.440 the injured majority whip, in his own way, may have 0:08:03.480 --> 0:08:05.600 brought some immunity to our long divided country. I have 0:08:05.640 --> 0:08:07.640 a feeling that Steve made a great sacrifice, but there 0:08:07.680 --> 0:08:10.560 could be some unity being brought to our country, let's hope. 0:08:10.600 --> 0:08:13.240 So how optimistic are you of that we we we 0:08:13.320 --> 0:08:17.720 have seen in these days since that terrible incident, Republicans 0:08:17.760 --> 0:08:20.200 Democrats sitting together, doing things together. Of course, an interview 0:08:20.240 --> 0:08:22.080 in the middle of that game last night with how 0:08:22.120 --> 0:08:25.920 Speaker Paul Ryan and that Minority leader Nancy Pelosi? Are 0:08:25.920 --> 0:08:27.920 you optimistic it's going to lead to to more comedy 0:08:27.960 --> 0:08:30.400 as you mentioned a few moments ago, And I hope, 0:08:30.400 --> 0:08:33.120 and I think most Americans hope. So I think, you know, 0:08:33.160 --> 0:08:36.760 a big difference between the Washington of today, even versus 0:08:36.800 --> 0:08:39.800 the Washington of ten or fifteen years ago, is that 0:08:39.840 --> 0:08:43.479 it's become political and personal. There are always political divisions, 0:08:43.480 --> 0:08:46.640 there's always some partisanship, but at the end of the day, 0:08:46.800 --> 0:08:50.440 it wasn't necessarily personal among members because they already had 0:08:50.480 --> 0:08:53.280 a foundation a relationship. They would go out to dinner together, 0:08:53.320 --> 0:08:56.199 their staffs to each other. I think that has changed 0:08:56.280 --> 0:08:59.520 with sort of the toxicity of the politics, and it's 0:08:59.559 --> 0:09:02.240 become much more personal. So as a result, these folks 0:09:02.240 --> 0:09:04.880 don't necessarily have as good relationships as I think they 0:09:04.960 --> 0:09:07.120 used to, and so they don't have a foundation for 0:09:07.160 --> 0:09:10.720 a negotiation. UM. So hopefully this type of you know, 0:09:10.760 --> 0:09:14.280 it's tragic event that could have a silver lining. I'm 0:09:14.280 --> 0:09:16.679 just not necessarily optimistic. Want to come back in redex 0:09:16.720 --> 0:09:18.840 healthcare as well. We talked about it earlier today with 0:09:18.920 --> 0:09:21.960 Libby Control, and it's so urgent here and immediate that 0:09:22.040 --> 0:09:25.320 we should do that one more time. Libby cantrol is 0:09:25.360 --> 0:09:28.280 with PIMCO. I guess I want to talk about something 0:09:29.120 --> 0:09:34.600 non inflammatory like healthcare, except let's start with a basic 0:09:34.800 --> 0:09:38.599 why why is it so secret in the Senate? I 0:09:38.840 --> 0:09:42.360 don't understand what does it? Two people know about it, 0:09:42.440 --> 0:09:44.559 and it's it's like in Raiders of the Lost Art, 0:09:44.600 --> 0:09:48.640 it's in the Covenant, eight stories down in the Pentagon. Well, 0:09:48.679 --> 0:09:50.520 I mean, and as we were talking about a little 0:09:50.520 --> 0:09:53.440 bit earlier, this this differs quite a bit from the 0:09:53.440 --> 0:09:56.800 Obamacare process, in which there were hundred hearings of the Senate, 0:09:56.840 --> 0:09:59.880 almost ninety hearings in the House. Um it was you know, 0:10:00.200 --> 0:10:03.280 arguably too public in that everybody had a point of view. 0:10:03.480 --> 0:10:05.840 I think Mitch McConnell, as we were talking about before, 0:10:05.880 --> 0:10:07.760 is trying to thread the needle here, and it is 0:10:07.800 --> 0:10:11.080 a um it is a small needle and a small 0:10:11.160 --> 0:10:16.240 hole because he is trying to pass a bill that 0:10:16.360 --> 0:10:19.560 is fundamentally unpopular with the American public um less than 0:10:20.160 --> 0:10:23.720 approve of the bill. But at the same time, he 0:10:23.760 --> 0:10:26.520 feels like if he doesn't then they are not fulfilling 0:10:26.679 --> 0:10:30.960 an important campaign promise. So this is really difficult politics here. 0:10:31.679 --> 0:10:34.640 I think that the conventional wisdom at this point is 0:10:34.679 --> 0:10:37.400 that Senator McConnell will may just bring up the bill, 0:10:37.480 --> 0:10:39.680 regardless if he has the votes or not, just to 0:10:39.720 --> 0:10:42.360 get some resolution on this. And we can talk about 0:10:42.360 --> 0:10:44.840 this in a little bit, but the sequencing of healthcare 0:10:45.000 --> 0:10:47.360 or the or the passage of healthcare predicates or the 0:10:47.360 --> 0:10:50.720 sequencing of these other things like the budget resolution, like 0:10:50.840 --> 0:10:53.640 tax reform. So they need to dispose of healthcare one 0:10:53.640 --> 0:10:55.600 way or the other in the next few months, or 0:10:55.800 --> 0:10:58.760 then their whole agenda could potentially be hijacked. The issue 0:10:58.760 --> 0:11:00.360 here is the ven diagram of it, all right, and 0:11:00.400 --> 0:11:02.840 I guess the capital is nothing but a giant than diagramy. 0:11:02.840 --> 0:11:04.319 From the House on one side the Senate on the other, 0:11:04.360 --> 0:11:06.920 they meet in the middle. When it comes to healthcare. 0:11:07.000 --> 0:11:09.840 Senate is starting from scratch on its own bill. What's 0:11:09.880 --> 0:11:12.320 the likelihood that that's going to resemble in any form 0:11:12.520 --> 0:11:14.079 what the House has put forward and that the House 0:11:14.160 --> 0:11:16.400 is going to be willing to accept whatever comes up? Well, 0:11:16.440 --> 0:11:19.360 and like like the House that has in terms of 0:11:19.400 --> 0:11:23.040 the Republican caucus, you know, the House has very conservative members, 0:11:23.040 --> 0:11:25.880 has very more moderate members. The Senate has the same dynamic. 0:11:26.440 --> 0:11:29.040 Uh So, I think it just depends on, you know, 0:11:29.360 --> 0:11:32.880 kind of whose fingerprints are on that bill. Um. That 0:11:33.040 --> 0:11:36.120 the hard thing, and again another political headwind here is 0:11:36.400 --> 0:11:38.440 what can pass the Senate may not be able to 0:11:38.440 --> 0:11:40.800 pass the House. However, I think if the Senate is 0:11:40.840 --> 0:11:44.280 able to get a bill out with you know, fifty 0:11:44.280 --> 0:11:46.000 and fifty two votes, right, this is going to be 0:11:46.040 --> 0:11:49.800 a partisan vote, fifty two Republicans in the Senate, so 0:11:49.920 --> 0:11:53.080 fifty six percent. You have to get of your caucus 0:11:53.080 --> 0:11:55.200 on board. If they can get that out, you know, 0:11:55.280 --> 0:11:58.160 my sort of presumption is that the House will feel 0:11:58.200 --> 0:12:00.600 like they have to pass it just again, get this 0:12:00.679 --> 0:12:04.040 off there, off their agenda. There are routines to Washington. 0:12:04.040 --> 0:12:05.680 Something that used to drive me crazy about it was 0:12:05.720 --> 0:12:08.840 how regularly the story was the same. And that's especially 0:12:08.880 --> 0:12:10.360 true when it comes to the death ceiling. With the 0:12:10.400 --> 0:12:12.560 debt limit, it would come up again and again and 0:12:12.600 --> 0:12:14.960 again in the debate. The conversation would be the same 0:12:15.000 --> 0:12:17.480 each time. What do you tie to it? If anything? 0:12:18.160 --> 0:12:20.559 Is this something that should be raised, etcetera, etcetera. Were 0:12:20.640 --> 0:12:23.839 there again? What are we hearing from this administration about that? 0:12:23.880 --> 0:12:25.480 And I say, we're there again. We really don't know 0:12:25.520 --> 0:12:27.679 when the actual date is that we're going to be 0:12:27.760 --> 0:12:30.400 up against that ceiling. Yeah, exactly. Um, so that's sort 0:12:30.400 --> 0:12:34.360 of the the ex date, the unknown date where Treasury 0:12:34.480 --> 0:12:38.280 exhaust its extraordinary efforts in terms of um, you know, 0:12:38.480 --> 0:12:41.000 the death ceiling limit to take a setback. It actually 0:12:41.040 --> 0:12:43.440 the deadline was March fifteenth, but then Treasury has been 0:12:43.520 --> 0:12:47.480 using extraordinary measures to delay that. Uh. You know, there's 0:12:47.559 --> 0:12:50.480 some thinking that it could be as early as August, 0:12:50.559 --> 0:12:54.760 although Secretary Minuchin was on the House testifying and saying 0:12:54.800 --> 0:12:57.360 that it probably was September. I think that, you know, 0:12:57.400 --> 0:12:59.680 the big question, here's what their strategy is going to be. 0:12:59.760 --> 0:13:03.280 And and to your point, there hasn't been a coherent 0:13:03.360 --> 0:13:06.240 strategy at least as of yet. Secretary Minutition wants a 0:13:06.240 --> 0:13:09.960 clean debt ceiling bill. Um mcmulvaney, oh and B director 0:13:10.000 --> 0:13:12.080 has said that he wants to have some provisions in 0:13:12.160 --> 0:13:15.160 terms of reducing spending. The problem with that is no 0:13:15.280 --> 0:13:17.240 Democrat will vote for it, and you need Democrats in 0:13:17.320 --> 0:13:19.320 order to lift the debt ceiling. I will just add 0:13:19.360 --> 0:13:21.120 to that the debt ceiling did not used to be 0:13:21.160 --> 0:13:23.000 as much of an issue. Um. It was a hard 0:13:23.080 --> 0:13:25.800 vote for members to take. But before two thousand eleven, 0:13:25.840 --> 0:13:29.280 this idea of adding things to it was really unpopular. 0:13:29.600 --> 0:13:32.760 Um and uh. And so you know, it's only really 0:13:32.760 --> 0:13:35.400 become a big issue over the last few years. But 0:13:35.600 --> 0:13:37.640 to your point, it could potentially be a big issue 0:13:37.640 --> 0:13:41.320 from the market's perspective, given the compression of the congressional 0:13:41.400 --> 0:13:43.000 calendar that you mentioned a few minutes ago. Do you 0:13:43.040 --> 0:13:45.720 think it's likely we're going to see changes to the 0:13:45.720 --> 0:13:49.840 the August recess. I know that lawmakers are love that recess, 0:13:50.440 --> 0:13:55.000 but there's take a note. Mr Gurr has just discovered 0:13:55.280 --> 0:14:00.040 the politicians only work thirty days a year. Well, I 0:14:00.040 --> 0:14:01.720 hope they take August recess because I want to take 0:14:01.760 --> 0:14:04.320 some vacation during August. But uh yeah, so you know, 0:14:04.360 --> 0:14:09.160 the August recess is sacro sanc among members of Congress. 0:14:09.200 --> 0:14:11.520 And I think you know, and I will I'll defend 0:14:11.520 --> 0:14:13.760 members here a little bit. And everyone thinks that they're 0:14:13.800 --> 0:14:16.040 on the beach. They really are going back to their districts. 0:14:16.040 --> 0:14:17.760 And you know, they of course they take some vacation 0:14:17.800 --> 0:14:20.160 with their families, but they really are going back to 0:14:20.200 --> 0:14:23.400 their districts and meeting the constituents. But I did work 0:14:23.400 --> 0:14:26.640 for a member of Congress um. But but I saw this, 0:14:26.720 --> 0:14:28.880 I mean I witnessed this live, that there were events 0:14:28.920 --> 0:14:31.880 in in the district. You know, regardless of what they're doing, 0:14:32.080 --> 0:14:34.680 they are it is sacro sanc. So I think under 0:14:34.720 --> 0:14:38.680 only extraordinary circumstances, I just I mean, it goes and 0:14:38.720 --> 0:14:40.440 it goes back, of course when it used to be 0:14:40.520 --> 0:14:43.640 by horseback and then by training where you had to 0:14:43.680 --> 0:14:46.080 go back and see people. This has been great. Let 0:14:46.080 --> 0:14:48.640 me carntil very generous of you be with us this 0:14:48.680 --> 0:14:52.040 morning with David Gura and time keeneild you where this 0:14:52.120 --> 0:15:08.120 worldwide coast to coast, this is bloomber. Let's get to 0:15:08.160 --> 0:15:11.680 our guests. Um, and he knows very much about the 0:15:11.680 --> 0:15:13.440 cf A. He is a c f A. As I 0:15:13.480 --> 0:15:17.760 am seeing Josephs with State Street Global Advisors with a 0:15:17.800 --> 0:15:21.560 particular look from Singapore on Southeast Asia and of course 0:15:21.600 --> 0:15:25.240 all of Asia and particularly on his Malaysia as well. 0:15:26.040 --> 0:15:29.160 Wonderful to speak to you this morning. Tell us the 0:15:29.200 --> 0:15:35.320 Southeast Asia policy towards China, not only Singapore and Malaysia, 0:15:35.600 --> 0:15:38.440 but is there a region, is a sphere? What is 0:15:38.480 --> 0:15:43.720 their relationship with China? I would say that the relationship 0:15:43.880 --> 0:15:46.280 is uh, it's been mixed. Adding on on the Jeo 0:15:46.360 --> 0:15:49.760 political side, as you've probably aware, there's always the South 0:15:49.880 --> 0:15:53.760 China see tension thing going on. So you know, while 0:15:53.760 --> 0:15:57.000 they're trying to defend you know, their sovereignty rights, um, 0:15:57.120 --> 0:15:59.800 you know, they could also be careful not to really 0:15:59.840 --> 0:16:03.440 antagonized China. When it comes to the economic front, Um, 0:16:03.480 --> 0:16:09.000 all these Southeast Asian countries certainly would welcome the Chinese participation. 0:16:09.400 --> 0:16:11.720 And as you know, the trade flows we did Nascia 0:16:11.800 --> 0:16:14.920 and as well as China is also very important. So 0:16:14.920 --> 0:16:17.000 so I would say that you know, from that perspective, 0:16:17.280 --> 0:16:19.800 the kind of view China as uh as as A 0:16:19.800 --> 0:16:22.680 as a big brother, um, that is going to be 0:16:22.680 --> 0:16:26.560 beneficial for economic terms, but also equally cautious when it 0:16:26.600 --> 0:16:30.680 comes to the the kind of geopolitical sphere. Yeah, we 0:16:30.680 --> 0:16:33.320 we we talked about the One Belt, One Road initiative 0:16:33.600 --> 0:16:37.560 in geopolitical terms largely, but what could it mean economically 0:16:37.640 --> 0:16:41.160 for the countries that stand to benefit or get resources 0:16:41.200 --> 0:16:45.680 from this, this Chinese Pact initiative. I think first that 0:16:45.720 --> 0:16:49.200 comes to mind would be on the infrastructure side. Um, 0:16:49.240 --> 0:16:51.720 you know, on the infrastructure side, it could be you know, 0:16:51.920 --> 0:16:54.760 in some cases would be pot it could be real 0:16:55.440 --> 0:16:59.600 roads constructions as well as the financing that comes to it. 0:17:00.080 --> 0:17:02.240 So I think in some of the areas, like the 0:17:02.280 --> 0:17:05.600 construction sectors, they could also benefit along the way. So 0:17:05.680 --> 0:17:09.000 I think that's going to create a second round effects 0:17:09.200 --> 0:17:11.840 for the economic growth. Let me ask you a bit 0:17:11.840 --> 0:17:13.600 about the Bank of Japan. As I mentioned, we've got 0:17:13.640 --> 0:17:15.760 a rate decision from the bo J just a few 0:17:16.119 --> 0:17:18.720 hours ago, capping off a week with a lot of 0:17:18.720 --> 0:17:22.360 central bank activity here in the US, we got more clearity, 0:17:22.400 --> 0:17:24.400 got some semblance of a roadmap for how the FED 0:17:24.520 --> 0:17:27.520 is going to begin to unwind its its balance sheet. 0:17:27.760 --> 0:17:29.840 How much eagerness is there from you and others to 0:17:29.920 --> 0:17:32.680 get more clarity on tapering from the b o J 0:17:32.960 --> 0:17:36.280 at this point. I think at this point BOG is 0:17:36.280 --> 0:17:40.320 playing a very careful game here close um, you know, 0:17:41.200 --> 0:17:44.520 choosing to keep the cards close to their chest. Um. Clearly, 0:17:44.920 --> 0:17:48.720 they are continuing to support the bond buying program. Uh, 0:17:48.760 --> 0:17:50.600 there's no sign that's going to ease at East at 0:17:50.600 --> 0:17:53.560 this stage. But equally they are fully aware of the 0:17:53.600 --> 0:17:55.679 fact that as the balance sheet continues to build at 0:17:55.680 --> 0:17:57.719 the central bank, at some point they will need to 0:17:58.040 --> 0:18:01.000 wind down. At this point, I do thing they are 0:18:01.119 --> 0:18:03.840 ready to do anything yet. So at this point I 0:18:03.880 --> 0:18:06.520 don't think they want to send a very clear signal 0:18:06.560 --> 0:18:09.399 to the market when that timeline comes. But I think 0:18:09.440 --> 0:18:12.920 they want to remain very flexible and to allow them 0:18:12.920 --> 0:18:15.600 more time to assess what are the options they have, 0:18:16.280 --> 0:18:20.000 What is the weapon of currency across Asia right now, 0:18:20.400 --> 0:18:25.000 we personal surveillance Asia d X, why the that Asian 0:18:25.080 --> 0:18:28.640 basket ex Japan or we look at Rettman, we look 0:18:28.640 --> 0:18:33.359 at the end. Is currency a weapon for the nations 0:18:33.400 --> 0:18:37.480 of Asia right now? I think it can be both 0:18:37.840 --> 0:18:41.480 to edge swords, so to speak. Now at this point 0:18:41.520 --> 0:18:43.960 in time, obviously the you know, at the beginning of 0:18:43.960 --> 0:18:46.240 the year, we're looking for a strong dollar, which it 0:18:46.280 --> 0:18:49.199 did happen, but subsequently now we're seeing a bit of 0:18:49.240 --> 0:18:52.680 a soft dollar. So from that standpoint, you know, generally 0:18:52.720 --> 0:18:56.960 the Asian countries will look for a dresdently reasonably kind 0:18:56.960 --> 0:18:59.639 of weak currencies to help to support the exports. But 0:18:59.720 --> 0:19:01.879 did would not want it to be two weeks that 0:19:01.920 --> 0:19:05.760 would create any sense of fear among investors, that would 0:19:05.800 --> 0:19:09.199 leave the countries from the capitol con perspective. So I 0:19:09.240 --> 0:19:11.199 think it's kind of like a double edged sword that 0:19:11.240 --> 0:19:13.840 they could do played very happily, and I don't think 0:19:13.880 --> 0:19:15.760 they want to really play too hot at this point. 0:19:16.359 --> 0:19:19.280 Thank you so much, Ken, seeing whether Saeson State Global 0:19:19.280 --> 0:19:23.200 Advisors out of Singapore with a great perspective. We don't 0:19:23.200 --> 0:19:25.360 do that enough, David, We don't do Southeast Asia enough. 0:19:32.480 --> 0:19:36.280 Runch you by Bank of America Mary Lynch. With virtual reality, 0:19:36.520 --> 0:19:41.959 virtually everything will change. Discover opportunities in a transforming world 0:19:42.400 --> 0:19:47.040 VI of a mL dot Com slash VR, Mary Lynch, Pierce, 0:19:47.080 --> 0:19:57.359 Fenner and Smith Incorporated. What I would suggest, David is 0:19:57.359 --> 0:20:03.720 our next guest is the absolute personification of application of 0:20:03.800 --> 0:20:06.919 math skills, the only equivalent and the sphere that we 0:20:07.000 --> 0:20:10.959 have of government tax analysis. Jane Sterley maybe at the 0:20:11.119 --> 0:20:14.800 legendary at the Urban Institute, and James Perturba, his colleague 0:20:14.840 --> 0:20:17.320 long ago at m I T this. This is a 0:20:17.320 --> 0:20:20.320 wonderful guy. Absolutely. Donald Marrin that joins us now. He's 0:20:20.320 --> 0:20:23.080 a director of Economic Policy Initiatives at the Urban Institute 0:20:23.080 --> 0:20:25.360 in Washington, d C. Former acting director of the Congressional 0:20:25.359 --> 0:20:27.679 Budget Office, from our deputy director of the Council of 0:20:27.720 --> 0:20:30.479 Economic Advisors at the White House. He joins us now 0:20:30.520 --> 0:20:32.159 on our phone line. Stunner and great to speak with 0:20:32.200 --> 0:20:34.639 you once again. And let's start with taxes, if we could. 0:20:35.119 --> 0:20:37.160 You for so long, the head of the Joint Urban 0:20:37.200 --> 0:20:40.600 Brookings Tax Policy Center. We've heard a lot about the 0:20:40.920 --> 0:20:43.760 border adjusted tax, the so called border adjusted tax. It 0:20:43.880 --> 0:20:46.280 was not something that was included on that list of 0:20:46.359 --> 0:20:49.040 principles the White House handed out at a briefing. Now 0:20:49.080 --> 0:20:51.560 a couple of months ago, there was a sense that 0:20:51.560 --> 0:20:54.400 maybe the White House might come around to it. What's 0:20:54.440 --> 0:20:57.720 what's your sense of the longevity of the vitality of 0:20:57.760 --> 0:21:01.959 the border adjusted tax in Washington, d C. Today? I 0:21:02.000 --> 0:21:04.080 think it's going to be much more vital in the 0:21:04.119 --> 0:21:08.200 analyst community than in the political community. The BAT, as 0:21:08.240 --> 0:21:11.160 we now call it, Uh, doesn't seem to have gotten 0:21:11.160 --> 0:21:15.080 the political attraction necessary to go forward. We saw House 0:21:15.119 --> 0:21:18.119 Ways and Means Committee Chairman Kevin Brady the other day 0:21:18.480 --> 0:21:20.960 beginning to talk about, well, maybe you can phase it 0:21:21.000 --> 0:21:24.160 in over time, things like that. Uh, And I gotta 0:21:24.200 --> 0:21:25.760 I gotta say I view that as sort of a 0:21:25.800 --> 0:21:29.480