WEBVTT - Valuations Are Just About Average, Herro Says 0:00:00.120 --> 0:00:02.920 Brought you by Bank of America Mary Lynch. Investing in 0:00:03.000 --> 0:00:07.840 local communities, economies and a sustainable future. That's the power 0:00:08.080 --> 0:00:12.360 of global connections, Mary Lynch, Pierce Fenner and Smith Incorporated 0:00:12.760 --> 0:00:27.400 Member s I p C. Welcome to the Bloomberg Surveillance Podcast. 0:00:27.840 --> 0:00:31.520 I'm Tom Keene with David Gura. Daily we bring you 0:00:31.560 --> 0:00:36.600 insight from the best in economics, finance, investment, and international relations. 0:00:37.000 --> 0:00:41.600 Find Bloomberg Surveillance on iTunes, SoundCloud, Bloomberg dot Com, and 0:00:41.680 --> 0:00:49.519 of course on the Bloomberg. John Gollub joins us now 0:00:49.520 --> 0:00:51.519 in our Bloomberg eleven three studios here in New York. 0:00:51.600 --> 0:00:53.920 John and Gollo the chief US market strate that RBC 0:00:54.080 --> 0:00:57.240 Capital Markets. We're just reminiscing about the evening of number 0:00:57.320 --> 0:00:59.880 November eight. You are here as we went through the results. 0:01:00.120 --> 0:01:03.240 Even what's your sense of what's happened since market wise? 0:01:03.240 --> 0:01:05.440 There was this swoon, there was this great enthusiasm in 0:01:05.480 --> 0:01:07.920 the markets afterwards. Help us understand what's been through the 0:01:07.959 --> 0:01:10.520 going through the dulations here leading up to today. Well, 0:01:10.600 --> 0:01:13.679 you mean, I think there's two stories. The first thing 0:01:13.760 --> 0:01:17.959 is there was this natural knee jerk reaction to to Trump. 0:01:17.959 --> 0:01:20.039 But then I think the market realized that these pro 0:01:20.080 --> 0:01:24.280 growth policies may actually um not you know, maybe maybe 0:01:24.360 --> 0:01:26.880 much more important or positive than people think. But what 0:01:27.000 --> 0:01:29.480 really has happened over the last four months is that 0:01:29.520 --> 0:01:32.680 the economy has been really good. Expectations for corporate profits 0:01:32.680 --> 0:01:37.080 have been good. UM. If you look at um market returns, 0:01:37.280 --> 0:01:39.160 the day before the election, when people thought Hillary was 0:01:39.160 --> 0:01:40.920 going to win, the market was up, and then after 0:01:41.319 --> 0:01:43.800 the market was still up. So it appears the real 0:01:43.800 --> 0:01:45.959 story here is this is way less about Donald Trump 0:01:45.959 --> 0:01:48.920 and really more about an approving global economy and US 0:01:48.960 --> 0:01:51.640 economy and the reflation trade. You've helped us with the 0:01:51.680 --> 0:01:53.720 definition of that, and your most recent note you you 0:01:53.760 --> 0:01:55.880 note that you know there are so many definitions spinning right, 0:01:55.920 --> 0:02:00.520 how do you define those reflationary pressures? We we've been in, uh, 0:02:00.560 --> 0:02:05.280 this ultra low inflation, ultra low interest rate environment, and 0:02:05.360 --> 0:02:08.480 it's been really damaging. And it's been damaging, for example, 0:02:08.680 --> 0:02:11.960 to people who are in retirement or planning for retirement, 0:02:12.240 --> 0:02:14.440 and it causes them to do something really interesting, was 0:02:14.600 --> 0:02:17.320 to save even more money because they can't get any 0:02:17.400 --> 0:02:20.160 kind of return on their assets. UM. While you would 0:02:20.160 --> 0:02:22.920 think that corporations would take advantage of these low interest 0:02:23.000 --> 0:02:25.320 rates they look at as a sign of the world 0:02:25.400 --> 0:02:28.520 being broken, and they do the opposite. They actually refused 0:02:28.560 --> 0:02:31.639 to invest and so so there's actually a fair bit 0:02:31.639 --> 0:02:34.400 of damage done by this this kind of environment. So 0:02:34.880 --> 0:02:38.240 reflating and getting back to something which looks more normal, 0:02:38.320 --> 0:02:39.960 where you can actually get a return on your bank 0:02:40.120 --> 0:02:42.639 you know, on on a savings account, that's actually a 0:02:42.720 --> 0:02:46.040 really positive thing and maybe the big surprise over the 0:02:46.040 --> 0:02:48.680 next year or two if rates can get back towards 0:02:48.680 --> 0:02:51.120 something that feels a bit more normal. Was there a 0:02:51.160 --> 0:02:53.120 Trump trade, as as you look back at it now, 0:02:53.240 --> 0:02:54.640 was there a Trump trade? If there was, when one 0:02:54.680 --> 0:02:56.520 did lose its luster for you, I think that there 0:02:56.600 --> 0:02:58.440 was probably Trump trade for about a week, you know, 0:02:58.639 --> 0:03:02.040 if you look. Market had this vicious sell off and 0:03:02.120 --> 0:03:07.040 stopped out really overnight, and then it bounced really hard. 0:03:07.080 --> 0:03:09.680 But for the last three and a half months, most 0:03:09.720 --> 0:03:12.120 of this has just been economics, and we can see 0:03:12.160 --> 0:03:15.800 that by the kinds of companies that are are driving 0:03:15.800 --> 0:03:18.560 the market. John's great to have David gur back. He 0:03:18.600 --> 0:03:21.760 took his family to Antarctica and I've got an email 0:03:21.800 --> 0:03:24.720 he was like a tour Tara del Fuego and he 0:03:24.800 --> 0:03:27.400 got at the Buenos Areas for the fight back, and 0:03:27.480 --> 0:03:31.480 it's long with that. Help us here with the idea 0:03:31.720 --> 0:03:36.000 of foreign investment right now, if I want to invest seriously, 0:03:36.040 --> 0:03:40.240 not in Antarctica, but in Argentina, is how do I 0:03:40.360 --> 0:03:43.560 express it? Now? Do I do it through US multinationals 0:03:43.800 --> 0:03:46.920 or do I buy abroad? You know, there's there's a 0:03:46.920 --> 0:03:49.800 ton is a big difference between the companies that you 0:03:49.800 --> 0:03:53.120 would invest in in the US compared to overseas. Um 0:03:53.280 --> 0:03:57.080 non US portfolios tend to have a ton of banks 0:03:57.120 --> 0:04:00.560 and old economy, and in the US, you you know, 0:04:00.680 --> 0:04:04.000 if you think about innovative tech companies and biotech companies, 0:04:04.280 --> 0:04:06.680 so the US kind of feels more like the Nasdaq 0:04:06.840 --> 0:04:09.760 is a bit fresher. The interesting thing though, is if 0:04:09.800 --> 0:04:15.080 the economy is bouncing, old economy, these old banks in 0:04:15.160 --> 0:04:19.679 old industry tends to actually bounce harder, which could surprisingly 0:04:19.760 --> 0:04:22.560 be good for some of these non US investments. What's 0:04:22.560 --> 0:04:25.920 been going on with emerging markets surprising results since the 0:04:26.120 --> 0:04:29.280 election you've versus Yeah, if you look at kind of 0:04:29.279 --> 0:04:32.200 the orthodoxy or and the data proves us to be 0:04:32.200 --> 0:04:35.320 the cases. When the dollar is strengthening, you don't want 0:04:35.320 --> 0:04:38.760 to be in emerging markets, and emerging markets have been 0:04:38.839 --> 0:04:42.280 on fire. Um, it's really about a re risking. I mean, 0:04:42.279 --> 0:04:44.640 what do you have right now is small caps are 0:04:44.640 --> 0:04:48.280 beating the markets. Riskier assets are beating the markets. Companies 0:04:48.320 --> 0:04:52.000 that are more volatile and less stable and less have 0:04:52.080 --> 0:04:55.560 less dependable earnings are beating the markets. And that environment 0:04:55.600 --> 0:05:00.200 has just been great for emerging market companies. And and 0:05:00.480 --> 0:05:02.400 it's it really has been the whole the big surprise 0:05:02.440 --> 0:05:04.200 over last three or four months. I was talking with 0:05:04.240 --> 0:05:06.679 our colleague Oliver Rennick, and he said that small caps 0:05:06.760 --> 0:05:08.320 is really where it's at at this point. How do 0:05:08.360 --> 0:05:10.320 you what's your advice on how to approach that space 0:05:10.880 --> 0:05:13.800 right now? If we're seeing that looked upon so favorably well, 0:05:13.960 --> 0:05:16.239 if you if you said, what are the real big wins, 0:05:16.240 --> 0:05:18.039 and all of them I think are going to continue. 0:05:18.040 --> 0:05:20.640 First of all, just betting on the banks as a 0:05:20.680 --> 0:05:23.840 win has been If you did that, nothing else you've got, 0:05:24.120 --> 0:05:28.799 you've done unbelievably well. I think that continues to ride. Um. 0:05:29.160 --> 0:05:34.080 Value stocks, cheap companies have you know, have outperformed the market. 0:05:34.440 --> 0:05:37.080 And then smaller companies. But the smaller company thing is 0:05:37.160 --> 0:05:40.520 really about risk. It's the fact that they are risky 0:05:40.600 --> 0:05:43.360 or more volatile, and that's what's really been driving it, 0:05:43.520 --> 0:05:46.800 not the fact that they're small. How do I catch? 0:05:48.000 --> 0:05:50.159 And I mean I heard this, it didn't buy the bank. 0:05:50.200 --> 0:05:53.400 I didn't hear this eighteen times this weekend, but I'm sorry, folks, 0:05:53.720 --> 0:05:57.080 I heard it like six times. The percentage of the 0:05:57.160 --> 0:06:01.560 institutional and retail public that hasn't made the bogey is 0:06:01.640 --> 0:06:04.640 I've never seen it. It's off the chart. Do you 0:06:04.720 --> 0:06:07.480 catch up with you so leverage? Do you catch up 0:06:07.760 --> 0:06:11.960 with going sexier, fancier higher? Beata to use a Greek letter, folks. 0:06:11.960 --> 0:06:15.240 We have to use a Greek letter every day. Last night, 0:06:15.600 --> 0:06:17.600 I mean, I mean they needed beta last night at 0:06:17.600 --> 0:06:20.239 the end of the oscars. Help me, Actually they needed 0:06:20.240 --> 0:06:23.960 a stiff drink. Help me here with how I catch up? 0:06:24.400 --> 0:06:26.440 You know, Tom, I don't think you want to invest 0:06:26.640 --> 0:06:29.560 thinking about how you catch. There's what you haven't done. 0:06:29.720 --> 0:06:31.360 So what you want to do is just you know, 0:06:31.720 --> 0:06:35.000 if you think that this thing has lags, I think 0:06:35.000 --> 0:06:36.760 that you want to get in it in the kind 0:06:36.760 --> 0:06:38.760 of in the and really what's been working the last 0:06:38.760 --> 0:06:42.320 few months. It's value companies. It's companies are a little 0:06:42.320 --> 0:06:46.039 bit riskier, it's banks, it's cyclical. The arch idea here, 0:06:46.200 --> 0:06:50.559 and please you're the pro I'm not. You jump into 0:06:50.560 --> 0:06:53.719 the market knowing you could enjoy a bear market of 0:06:53.920 --> 0:06:56.760 x percent down and you still got to get in 0:06:56.760 --> 0:07:01.279 the market psychologically ready to take that hit if it comes. 0:07:01.960 --> 0:07:05.960 We've all gotten spoiled. I forget about whether you you 0:07:06.160 --> 0:07:08.640 you have a pullback of two percent or five percent 0:07:08.720 --> 0:07:10.400 or something like that, which is which is normal and that. 0:07:11.760 --> 0:07:15.920 But but if you're talking about really big you know, pullbacks, 0:07:15.960 --> 0:07:20.239 they almost only occur when you have recessions, and there's 0:07:20.280 --> 0:07:23.600 just none of the indications that a recession is around 0:07:23.640 --> 0:07:26.760 the corner are in place. So the likelihood of having 0:07:27.080 --> 0:07:31.320 that walloping pull back's just extremely alone that you lower 0:07:31.360 --> 0:07:33.480 right now. You have to have something really go badly 0:07:34.080 --> 0:07:37.880 um and and right now from an economic and markets perspective, 0:07:37.880 --> 0:07:39.440 it doesn't appear to be there. Could we be missing 0:07:39.440 --> 0:07:41.720 something We talked about orthodoxy and how emerging markets should 0:07:41.720 --> 0:07:43.920 be performing with the dollar ware it's at Could we 0:07:43.960 --> 0:07:46.080 be missing something when it comes to forecasting for a 0:07:46.160 --> 0:07:52.400 recession at this point if there can clearly be policy issues, 0:07:52.520 --> 0:07:55.480 and you know, if you have these border just a 0:07:55.560 --> 0:07:57.600 tax issues, or if we end up in a trade war, 0:07:58.000 --> 0:07:59.960 or if to some type of a geopolitical event, they 0:08:00.040 --> 0:08:03.560 could be really disruptive and in the market struggling with 0:08:03.600 --> 0:08:06.240 a hand handicap that but if you look even at 0:08:06.280 --> 0:08:09.280 the volatility in the market, the market's telling you that 0:08:09.280 --> 0:08:14.240 that it thinks the likelihood of those things is reasonably low. So, yeah, 0:08:14.280 --> 0:08:16.320 we could be missing We could always be missing something. 0:08:16.880 --> 0:08:19.280 But the yield curve that you know, the difference between 0:08:19.280 --> 0:08:22.280 a long dated bond and something that's near you know, 0:08:22.320 --> 0:08:25.240 a short dated UM, it's steep. That's a sign that 0:08:25.320 --> 0:08:28.640 you're not likely to have a recession. Um. You know, 0:08:28.880 --> 0:08:32.920 the employment market, we're creating lots of jobs. That's not 0:08:33.000 --> 0:08:37.119 something you have as you're moving towards a recession. Wages 0:08:37.160 --> 0:08:41.000 arising steadily, that's not something that has housing activity. You know, 0:08:41.320 --> 0:08:43.000 if you've made a list of the dozen things you 0:08:43.000 --> 0:08:45.200 want to see to tell you that recessions aren't around 0:08:45.200 --> 0:08:48.120 the corner, you know ten of the twelve or telling 0:08:48.160 --> 0:08:49.679 you or twelve or the twelve we're telling you that 0:08:49.720 --> 0:08:52.160 everything's gone. You and I mentioned the banks earlier. You 0:08:52.240 --> 0:08:54.920 said me, in the banks, if you believe in higher rates, 0:08:54.960 --> 0:08:57.679 what about the industrials. The President likes to trot these 0:08:57.720 --> 0:09:01.160 people out a photo fest at the White House. Are 0:09:01.160 --> 0:09:04.600 they happy? I mean Emerson Electric the CEO shows up. 0:09:05.040 --> 0:09:08.600 Is the Emerson Electrics of the world happy. I think 0:09:08.640 --> 0:09:13.400 it's a much murkier picture. The g D P ain't there. Well. 0:09:13.880 --> 0:09:15.640 But if you think about if you're a company, one 0:09:15.640 --> 0:09:17.040 of the things you want to know is where you're 0:09:17.040 --> 0:09:19.959 gonna get your supplies from. And if you don't know 0:09:20.040 --> 0:09:23.120 what the border adjusted taxes or trade agu is gonna be. 0:09:23.240 --> 0:09:24.640 If you're a Ford and you don't know whether you're 0:09:24.640 --> 0:09:28.080 making cars in Mexico or the United States, it affects decisions. 0:09:28.120 --> 0:09:29.880 It's hard to me. I'm glad you mentioned this. We're 0:09:29.880 --> 0:09:31.880 gonna come back with John Gallup. Here's gonna do, folks, 0:09:32.040 --> 0:09:34.200 because you know my theme this week. And besides, I 0:09:34.200 --> 0:09:37.520 missed David Girl so much like Antarcticle with the kids. 0:09:37.960 --> 0:09:40.480 Are you kidding me? A sheet of ice is gonna 0:09:40.480 --> 0:09:44.240 fall into the ocean anyways, I said, besides missing David Girl, 0:09:44.280 --> 0:09:46.280 I said, I gotta read about the border tax I'm 0:09:46.280 --> 0:09:50.240 gonna put out on Twitter two killer articles on the 0:09:50.280 --> 0:09:54.120 border tacks that I looked at. Uh, this uh weekend, 0:09:54.120 --> 0:09:56.280 We're gonna rip up the script big time right now. 0:09:56.320 --> 0:10:02.120 Greg Villier just wrote a blistering note on Republican reality, 0:10:02.280 --> 0:10:05.040 speaking about an epic war to come in the budget battle. 0:10:05.520 --> 0:10:08.880 He takes it back John Gallop to the Budget Control 0:10:08.960 --> 0:10:13.480 Act of two thousand eleven, which sets the question your 0:10:13.640 --> 0:10:16.760 caps and you know all the rest of it. What 0:10:17.040 --> 0:10:21.080 happens to your world And forget about the politics of this, folks, 0:10:21.160 --> 0:10:24.520 pro Trump, anti Trump. If we just get delay, if 0:10:24.559 --> 0:10:29.240 the X axis extends out where what we thought would 0:10:29.240 --> 0:10:32.600 happen in April happens in November, where we thought what 0:10:32.640 --> 0:10:35.280 would happen in November is pushed into the next year. 0:10:35.600 --> 0:10:39.280 If two thousand eighteen is pushed to two thousand twenty, 0:10:39.320 --> 0:10:41.920 how does your world respond to that? Well, first of all, 0:10:41.920 --> 0:10:43.920 I think that's exactly what's going to happen. I mean, 0:10:44.120 --> 0:10:47.480 you saw this with Minuchin who talked about hoping to 0:10:47.559 --> 0:10:52.160 get something on taxes by August, which probably means that 0:10:52.240 --> 0:10:58.440 getting something on taxes is a two thousand and eighteen events. Um, 0:10:58.480 --> 0:11:02.679 as long as we are confident that there's something which 0:11:03.200 --> 0:11:07.600 looks like pro growth somewhere in the attainable future. Six 0:11:07.679 --> 0:11:10.440 months nine months twelve months out. I think the market 0:11:10.520 --> 0:11:13.240 stays perfectly engaged. What we don't want to see is 0:11:13.280 --> 0:11:16.320 the process breakdown in front of us to believe that 0:11:16.360 --> 0:11:18.400 it can't happen as long as we have that promise 0:11:18.760 --> 0:11:20.360 a year from now, six months from now. All the 0:11:20.400 --> 0:11:22.000 same time, I look at the Bloomberg, I pick up 0:11:22.000 --> 0:11:23.800 the FT, I see a lot of articles about how 0:11:23.880 --> 0:11:26.920 investors are very hungry for detail in the speech tomorrow night. 0:11:26.960 --> 0:11:29.720 And you look back at history State of Union addresses, 0:11:29.800 --> 0:11:32.800 joint UH addresses to joint Sessions of Congress are usually 0:11:32.800 --> 0:11:35.040 short on details. They're full of sweeping statements, and seems 0:11:35.040 --> 0:11:37.520 like from Gregvlier's note, the tom I just mentioned, we're 0:11:37.520 --> 0:11:39.760 going to get a big, sweeping rhetorical speech tomorrow night. 0:11:39.840 --> 0:11:41.839 How important are the details to you? How important is 0:11:41.880 --> 0:11:44.160 it that there be details in that speech tomorrow night? Okay, 0:11:44.160 --> 0:11:48.760 so the details are really important, and I have zero expectations. 0:11:48.880 --> 0:11:51.400 I mean, I mean, you're talking about, David that on 0:11:51.600 --> 0:11:54.480 a president other than Donald Trump has been short on 0:11:54.520 --> 0:11:58.559 giving details. What's the what's the incentive for Donald Trump 0:11:58.600 --> 0:12:01.240 to give details at this very moment of time. David, 0:12:01.559 --> 0:12:05.120 continue here, but I just had an incredible insight went 0:12:05.160 --> 0:12:08.760 through my Monday morning brain. Forget about fake news. What 0:12:08.880 --> 0:12:13.160 if he started going on fake strategy guys like John 0:12:13.240 --> 0:12:16.120 fake strategy from John gollub, I mean, that could be 0:12:16.120 --> 0:12:18.840 that that could be the next frontier for Bloomberg surveillance. 0:12:18.840 --> 0:12:21.120 We can debate the fakeness of it. But listening to 0:12:21.160 --> 0:12:24.120 the Sunday shows yesterday on on Bloombergradi yesterday afternoon, there 0:12:24.160 --> 0:12:25.880 were a lot of conversations about here we are a 0:12:25.880 --> 0:12:28.199 few weeks into the first hundred days, so there's still 0:12:28.200 --> 0:12:31.880 time to go. But we haven't seen great movement in 0:12:31.920 --> 0:12:33.959 the House or Senate when it comes to repealing the 0:12:33.960 --> 0:12:35.560 Affordable Care Act. We haven't seen a lot when it 0:12:35.559 --> 0:12:38.360 comes to tax reform. How worried about that? Are you? 0:12:38.440 --> 0:12:40.800 That the that the great strategic promise there was a 0:12:40.840 --> 0:12:44.000 lot of this stuff would happen early. You know, from 0:12:44.000 --> 0:12:47.200 a market's perspective, what's most important is that he give 0:12:47.320 --> 0:12:49.920 priority to the things that the market cares about most. 0:12:50.280 --> 0:12:54.800 And so the market doesn't care about um immigration issues. 0:12:54.840 --> 0:12:56.880 The market care is really about two things that care about. 0:12:56.920 --> 0:12:58.599 It doesn't care about the New York Times. Yeah, and 0:12:58.679 --> 0:13:01.120 the market doesn't care about but but the latest tweet 0:13:01.160 --> 0:13:02.679 or whether he shows up to you know, to a 0:13:02.760 --> 0:13:05.679 press event. What the market cares about is, um, are 0:13:05.720 --> 0:13:07.960 we going to see something on taxes? And and frankly, 0:13:08.040 --> 0:13:10.360 if it happens at the beginning of eighteen instead of 0:13:10.360 --> 0:13:12.400 the middle of seventeen, as long as we believe that 0:13:12.440 --> 0:13:14.679 in directly it's moving, so I think the market is 0:13:14.720 --> 0:13:16.320 going to be comfortable with that. And the market wants 0:13:16.320 --> 0:13:19.360 to see, you know, a pullback in regulation and all 0:13:19.440 --> 0:13:22.440 these things. Taxes is really hard, but on the regulatory front, 0:13:22.440 --> 0:13:25.320 there's a lot that it can do through executive order. UM. 0:13:25.480 --> 0:13:29.440 There there is areas such as financial regulation. We're both 0:13:29.480 --> 0:13:32.680 Democrats and Republicans believe that there are areas within Dodd 0:13:32.679 --> 0:13:35.520 Prank Frank that can be improved upon. So even a 0:13:35.600 --> 0:13:38.720 modest softening of things like that, UM would would really 0:13:38.760 --> 0:13:41.160 be quite appealing. What the market doesn't want to see 0:13:41.640 --> 0:13:43.880 is an obsession on things that don't matter to the economy. 0:13:44.160 --> 0:13:47.120 As an investor, am I happy that executive from big 0:13:47.120 --> 0:13:49.400 companies are now interfacing with the president in a new way, 0:13:49.400 --> 0:13:51.440 that they're being called to the portico, that they're being 0:13:51.440 --> 0:13:53.160 called to the cabinet room to meet with the president 0:13:53.360 --> 0:13:55.280 to have these listening sessions. Is that a good thing, 0:13:55.360 --> 0:13:57.320 that new kind of dynamic. You know, as as I'm 0:13:57.320 --> 0:14:00.839 talking to institutional investors, they're frankly not spending as much 0:14:00.840 --> 0:14:03.719 time worrying about the latest photo up with what they 0:14:03.840 --> 0:14:06.040 what they're obsessing on which they're not getting to your 0:14:06.040 --> 0:14:09.120 point is they want to see the actual details around 0:14:09.200 --> 0:14:11.760 this tax plan more than anything else. In the extent 0:14:11.800 --> 0:14:15.000 that they can get that on some regulatory issues as well. Great, Um, 0:14:15.080 --> 0:14:16.920 but it appears as if this stuff is going to 0:14:16.960 --> 0:14:19.680 be um, take a little time. And I think Manuchin 0:14:20.080 --> 0:14:23.800 did a brilliant job of putting August out there by 0:14:23.880 --> 0:14:26.720 basically saying, is I'm promising if something's on the come, 0:14:27.320 --> 0:14:29.320 just be patient with me. And I think that that 0:14:29.360 --> 0:14:31.680 was a really smart move. You must be happy now 0:14:31.760 --> 0:14:33.520 to see Steven Manuchan in that job, to see Rex 0:14:33.560 --> 0:14:35.840 de Lerson confirming in that job. It must provide some 0:14:35.880 --> 0:14:38.600 stability for the market to have the heads of those 0:14:38.600 --> 0:14:41.520 agencies in place. Yeah, And I think that there's a 0:14:41.560 --> 0:14:43.880 wide belief that whether you agree with their politics or 0:14:43.920 --> 0:14:45.520 this or that, that they're grown ups in the seats 0:14:45.520 --> 0:14:49.080 their reasonable guys. Um. If you look at the when 0:14:49.280 --> 0:14:51.720 when Tillerson was speaking to foreign leaders or when the 0:14:51.800 --> 0:14:54.360 Vice president speaking to foreign leaders, they're speaking with with 0:14:54.400 --> 0:14:57.720 the tone which is I think pretty comfortable for people. Lincoln, 0:14:57.960 --> 0:14:59.720 we're gonna run out of time here, Lincoln, here in 0:14:59.760 --> 0:15:04.040 thir seconds your view with Tom Purcelli's view, there are 0:15:04.080 --> 0:15:07.200 we going to get the g d P the president 0:15:07.360 --> 0:15:10.480 needs to make America great again. Let's call it three 0:15:10.520 --> 0:15:14.600 point zero. Yeah, we have a shot at something between 0:15:14.640 --> 0:15:17.080 two and a half and three percent this year. But 0:15:17.080 --> 0:15:19.040 but the real I think that what you're gonna get 0:15:19.240 --> 0:15:24.560 is nominal GDP will be substantially hired. That's GDP plus inflation. 0:15:24.600 --> 0:15:27.560 What's that We can't talk real wages. You gotta come 0:15:27.560 --> 0:15:30.160 back and we got to talk about real wages will 0:15:30.200 --> 0:15:33.080 be out. That's that's what people will focus on. Okay, 0:15:33.160 --> 0:15:36.520 John Golif RBC Capital Markets, thank you for the time commitment. 0:15:37.000 --> 0:15:42.680 This Monday morning, David Gura and Tom Keen worldwide, coast 0:15:42.720 --> 0:15:58.040 to coast. This is Bloomberg. David, I want you to 0:15:58.080 --> 0:16:00.200 bring in the next guest here as we tell talk 0:16:00.200 --> 0:16:03.600 about policy in the abstract issues of medicine. But I 0:16:03.640 --> 0:16:06.720 just want to say, David that every parent has tattooed 0:16:07.000 --> 0:16:10.400 to their brain the once a year, the once every 0:16:10.440 --> 0:16:14.080 three years. Where you you go, where you go where 0:16:14.080 --> 0:16:19.360 I live is five. He's that's where you go when 0:16:19.400 --> 0:16:22.320 you need there's that moment where you need to go 0:16:22.920 --> 0:16:26.800 with said child, and it's He's sixty Street, New York, 0:16:26.800 --> 0:16:28.760 New York. A man very familiar with that addresses Dr 0:16:28.800 --> 0:16:30.400 Steve core and he's the President and c of New 0:16:30.480 --> 0:16:33.480 York Presbyterian Hospital. Joining us here in our studios in 0:16:33.480 --> 0:16:35.440 New York as the President prepares to meet with health 0:16:35.440 --> 0:16:38.560 insurance company CEOs. He's calling it a listening session. Today 0:16:38.600 --> 0:16:40.200 he's had he's had a few of these. Were you 0:16:40.240 --> 0:16:41.800 around the table or what would you say to him 0:16:41.800 --> 0:16:44.960 about what needs to happen to Affordable Care Act, whether 0:16:45.000 --> 0:16:48.640 it's repeal, replaced, repair? What does the government need to 0:16:48.680 --> 0:16:51.040 do here to write the ship? Well, I think repeal 0:16:51.400 --> 0:16:54.920 is UH an overreach. I think that the Medicaid expansion 0:16:54.960 --> 0:16:58.520 has worked. I think a number of Republican governors have 0:16:58.640 --> 0:17:02.160 told the President that I think the Medicaid expansion should 0:17:02.160 --> 0:17:06.240 continue and not be rolled back. UH. The individual insurance 0:17:06.240 --> 0:17:09.800 market needs to be repaired. We have many areas in 0:17:09.840 --> 0:17:12.320 the country where there's only a single insurer. People are 0:17:12.320 --> 0:17:16.919 concerned about deductibles and premiums, but that individual insurance market 0:17:16.960 --> 0:17:19.520 cannot work in the absence, in my opinion, of an 0:17:19.560 --> 0:17:23.199 individual mandate and subsidies for the insurance companies. And I 0:17:23.240 --> 0:17:26.040 think the health insurance executives will tell the President that 0:17:26.080 --> 0:17:28.359 today you've got a company like pulling out of a 0:17:28.400 --> 0:17:30.320 number of these markets saying they're not eager to get 0:17:30.320 --> 0:17:32.040 back into them at this point in time. What's it 0:17:32.080 --> 0:17:34.200 going to take these insurers to get back into markets 0:17:34.200 --> 0:17:36.320 that they well, I think first there needs to be stability. 0:17:36.960 --> 0:17:39.440 You need to tell people this is where we're going. 0:17:40.160 --> 0:17:43.320 I think it would be very unfortunate if with the 0:17:43.359 --> 0:17:47.800 House Republican Reconciliation Bill, the individual mandate and the subsidies 0:17:47.800 --> 0:17:51.480 were removed, because that that will just precipitate this happening. Doctor, 0:17:51.560 --> 0:17:55.160 you're out of Northwestern and then Columbia p ands and 0:17:55.280 --> 0:17:58.400 you've got this blending of being a practicing cardiologist with 0:17:58.960 --> 0:18:03.880 the actual running of hospital. What do doctors and nurses 0:18:04.200 --> 0:18:08.760 want or think of this silly debate in Washington. Basically, 0:18:08.800 --> 0:18:13.320 we have non experts experting on the fact that if 0:18:13.400 --> 0:18:16.199 David Gura's kids or my kids are sick. We need 0:18:16.280 --> 0:18:19.040 them fixed by the best talent we can find. How 0:18:19.080 --> 0:18:23.639 do you people respond to this debate? In Washington, we 0:18:23.680 --> 0:18:26.240 have over thirty thousand employees, and I would tell you 0:18:26.320 --> 0:18:28.840 that their response to this is, when somebody's sick, you've 0:18:28.880 --> 0:18:31.920 got to take care of them. One out of every 0:18:31.960 --> 0:18:34.719 four people in New York State is on Medicaid. One 0:18:34.760 --> 0:18:37.840 out of every three New York City residence is on Medicaid, 0:18:37.880 --> 0:18:41.280 and this is replicated throughout the country. UM. I think 0:18:41.280 --> 0:18:45.640 it's important to recognize that Medicaid insures over seventy five 0:18:45.640 --> 0:18:49.200 million Americans, and you have to have insurance in this country. 0:18:49.280 --> 0:18:51.960 Access to care is not insurance. One of the great 0:18:52.000 --> 0:18:54.800 things is that Logan in Boston are there's many other cities. 0:18:54.840 --> 0:18:59.639 Here at JFK, foreign people come here when they're really sick. 0:19:00.080 --> 0:19:03.199 I've seen it. They come through our airports, whether it's 0:19:03.240 --> 0:19:08.040 Cleveland Clinic or Mgture You're wonderful hospital. How do we 0:19:08.240 --> 0:19:12.240 repair and move forward away from six of gdp HE 0:19:12.280 --> 0:19:16.920 or whatever we're spending to the proper balance of medicine. 0:19:17.720 --> 0:19:19.480 I think in order to bend the cost curve, you've 0:19:19.480 --> 0:19:23.679 got to deal more with preventive health, mental health. I 0:19:23.720 --> 0:19:26.680 know this is unpopular in many areas, but UM, I 0:19:27.000 --> 0:19:30.040 am in favor of attacks on sugary drinks. You've seen 0:19:30.040 --> 0:19:34.320 in Mexico, the the reduction in soda consumption. Uh, if 0:19:34.359 --> 0:19:38.480 you can't prevent illness, you're going to have UM six 0:19:38.520 --> 0:19:42.000 substantial expenses associated with caring for people, and I think 0:19:42.080 --> 0:19:43.800 that that is one of the things that should be 0:19:43.880 --> 0:19:46.399 kept with the Affordable Care Act. Just about thirty seconds 0:19:46.480 --> 0:19:48.960 left too short. I'm sorry to say it. Are you? 0:19:49.000 --> 0:19:50.480 Are you convinced this is going to be a more 0:19:50.480 --> 0:19:52.919 participatory process going forward. A lot of people have complained 0:19:52.920 --> 0:19:55.200 that when the Portal CARECT came about, all the parties 0:19:55.200 --> 0:19:57.679 were involved in crafting it. That needed to be when 0:19:57.760 --> 0:19:59.720 it comes to changing the law. Do you think more 0:19:59.800 --> 0:20:01.040 voy say we're going to be here, They're gonna be 0:20:01.040 --> 0:20:02.520 more voices at the time. I would hope that we 0:20:02.520 --> 0:20:05.120 can get bipartisan support on that. Right now, it looks 0:20:05.160 --> 0:20:07.520 like it is just going to be one party doing it, 0:20:07.600 --> 0:20:10.119 and I think that would be unfortunate. Do I have 0:20:10.160 --> 0:20:13.439 to walk ten thousand steps today? I'd like for you 0:20:13.520 --> 0:20:19.879 to go away the tall ten thousand step things you 0:20:19.920 --> 0:20:22.760 think is A is A is an adequate measure of 0:20:23.119 --> 0:20:26.240 good health. A path to good health. Exercise is great 0:20:26.280 --> 0:20:28.200 for the brain, great for the heart, and I would 0:20:28.320 --> 0:20:31.439 urge everybody to exercise. You are you are so done. 0:20:32.680 --> 0:20:36.680 Dr Corwin, Thank you so much. Presbyterian. Please come by 0:20:36.720 --> 0:20:38.800 in a weekly. Oh I just got in a message 0:20:38.840 --> 0:20:44.200 here from Mrs Keane. Have Dr Carwin daily. Okay, thank you, 0:20:44.400 --> 0:20:55.760 David Garrow Toime Keen. This is Bloomberg, brought you by 0:20:56.000 --> 0:20:59.680 Bank of America. Mary Lynch. Dedicated to bringing our clients 0:20:59.800 --> 0:21:02.840 in sites and solutions to meet the challenges of a 0:21:02.880 --> 0:21:07.760 transforming world. That's the power of global connections, Marylynch, Pierce 0:21:07.880 --> 0:21:15.639 Federin Smith Incorporated, Member s I p C. David Gura, 0:21:15.840 --> 0:21:21.879 this is very, very smart work on our foreign policy 0:21:22.040 --> 0:21:26.680 and the choices in the debates the new administration has 0:21:26.720 --> 0:21:30.560 to do. I like Trump's team of rivals. It's very lincolness. 0:21:30.840 --> 0:21:33.560 Thomas Wright is online director of the Project on International 0:21:33.640 --> 0:21:36.639